Five Questions to Ask Yourself When Choosing a Trustee for Your Special Needs Trust
The choice of trustee is one of the most important decisions you'll make regarding your special needs trust. Here are five...
Read moreThe trustee of a special needs trust recently faced the dilemma of whether to allow trust funds to be spent on pay-per-view pornography that had been requested by the trust's beneficiary. Was this permitted, the trustee wanted to know, and, if so, was the trustee required to fulfill the request?
Special needs trusts are specifically designed to provide beneficiaries with access to services and care above and beyond the benefits that they receive from government programs. However, the government places several important restrictions on these trusts which, when followed, allow a beneficiary to keep his or her benefits. One of the most important restrictions prohibits a beneficiary from having any control over the assets in the trust -- the trustee must have full discretion to distribute the trust funds for the benefit of the person with special needs without interference.
Local Special Needs Planners in Your City
In cases where an adult trust beneficiary suffers from a purely physical disability that does not cause any cognitive impairment, a tension often develops between the beneficiary, who wants access to the trust funds, and the trustee, who must serve as a gatekeeper. Since a special needs trust cannot usually provide money directly to a beneficiary, it is the trustee's job to arrange for payment directly with the provider of a service for things a beneficiary needs, things that in some cases may be questionable. Chances are that if you serve as a trustee for a beneficiary in this situation, you will face (or have already faced) a request from the beneficiary for the trust to pay for something that you may not personally feel good about, like cigarettes, liquor or pornography.
One trustee of a special needs trust recently asked an ASNP attorney whether he had to honor the trust beneficiary's request for numerous pay-per-view pornographic movies. The beneficiary's mother claimed that watching adult movies was an outlet for the beneficiary because he had a limited social life. But the trustee felt that paying for the viewing of 12 adult movies in four days was a waste of the trust's assets and that the trustee's duty to conserve the assets prevented the payment.
The ASNP attorneys who recently discussed this situation all agreed that the Social Security Administration does not have a blanket prohibition against using trust funds for cigarettes or pornography since these items do not qualify as food or shelter, for which payments are severely limited by federal law. However, attorneys differed about whether a trustee should make the payments for such items. Several attorneys spoke out strongly in favor of the beneficiary's right to view what he wants, or to smoke cigarettes, without the trustee imposing his or her own values. On the other hand, other attorneys suggested that the trustee should seek out other alternatives that may provide more lasting benefits to the person with disabilities.
Every trust beneficiary is different, making it impossible to accurately suggest a solution without knowing all the circumstances. But trustees don't have to make such decisions in a vacuum. The best course of action is to work with an experienced special needs planner who understands the beneficiary's situation and who will be able to provide guidance to you, as the trustee, about trust distributions and other more beneficial alternatives that may exist.
The choice of trustee is one of the most important decisions you'll make regarding your special needs trust. Here are five...
Read more
Trustees of special needs trusts have many important responsibilities, but these five likely rank at the top of any truste...
Read more
When serving as the trustee of a special needs trust, it is crucial to be careful when making distributions for the benefi...
Read more