When creating a special needs trust (SNT) for a loved one with a disability, the grantor (the person funding the trust) often serves as the first trustee. However, choosing a successor trustee is just as important. This person will manage the trust long-term and must act in the beneficiary’s best interest. Trusts usually operate on an honor system unless courts intervene, so the successor trustee must be reliable, honest, and capable.
The Role of a Special Needs Trustee
A trustee’s responsibilities include:
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Investing trust property wisely
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Maintaining accounting and bookkeeping records
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Communicating with beneficiaries
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Filing trust taxes
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Distributing assets while balancing current and future needs
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Monitoring the beneficiary’s welfare and adjusting support as needed
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Protecting the beneficiary’s eligibility for public benefits
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Reporting to benefit agencies
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Collaborating with family, guardians, teachers, and care providers
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Distributing trust assets when the trust ends or the beneficiary passes away
How to Select the Right Trustee
Finding a willing trustee can be difficult. Ideally, a trustee’s life expectancy should exceed the beneficiary’s. If this is not possible, the trust document can allow the trustee or a trust protector to appoint a successor.
Some families hire a professional trustee through a bank, trust company, or attorney group. Professional trustees have the training to manage investments, taxes, and compliance. A family member can still serve as co-trustee, but some professional groups only manage larger trusts.
Considering a Pooled Trust
Families with smaller SNTs often choose a pooled trust. Nonprofit organizations administer pooled trusts for multiple beneficiaries, reducing costs and increasing investment opportunities.
Pros: lower fees, professional management, and access to diversified investments.
Cons: less flexibility, limits on owning real estate or unusual assets.
An experienced special needs planning attorney can help decide if a pooled trust fits your loved one’s needs.
Discussing the Role with Your Chosen Trustee
Once you have a candidate, have them read and understand the trust document. They must know the scope of responsibilities, assets, and the beneficiary’s needs before accepting. If there are co-trustees, clearly outline duties. For example, a bank may handle investments and tax filings, while another trustee manages personal care decisions.
If there is only one trustee, they should feel free to consult professionals when needed. The trust should cover these advisor or attorney costs. It should also protect the trustee from liability unless there is gross negligence or intentional wrongdoing. Professional trustees are generally held to higher standards than family members, making liability concerns less significant when using a professional co-trustee.
Maintaining Support and Communication
Trustees must communicate regularly with the beneficiary’s support network—family, guardians, social workers, teachers, and caregivers. This ongoing communication ensures they meet the beneficiary’s changing needs and adjust the trust management appropriately.
Compensation for Trustees
Serving as a trustee requires time, compassion, and dedication. Many family members serve without pay. However, if the responsibilities are extensive, reasonable compensation may motivate someone to take on the role. Professional trustees charge fees that vary based on the trust’s complexity.
The Bottom Line
The most important factor in choosing a trustee is honesty. A good trustee will act in the beneficiary’s best interest and seek expert help if the job becomes too challenging. While the future cannot be controlled, you can set up systems and choose capable people to manage your loved one’s care.
Working with a special needs planning attorney ensures the trust is structured correctly and that the right trustee is in place. This planning offers peace of mind and provides the best support for your loved one’s future.
📞 Need Help? Contact Aging in Maine at (207) 848-5600 or visit our CONTACT page to start planning today.
