The Attorneys Of Stewart Sorice Farrell Finoli And Cavanaugh LLC

Choosing a trustee for your special needs trust

On Behalf of | Mar 5, 2021 | Estate Planning |

As the Pennsylvania parent of a child with a disability, you may be wondering how to maximize what you leave your child without having those assets impact his or her eligibility for government benefits. Many parents facing similar circumstances get around assets impacting public assistance eligibility by placing those assets into a special needs trust. 

Per the Special Needs Alliance, you may fund a third-party special needs trust through a variety of methods. Many parents of children with disabilities chose to fund theirs with life insurance policies. While figuring out how to fund a special needs trust is an important step in the estate planning process, so, too, is naming a trustee for the trust. Consider the following before deciding who should hold this responsibility. 

Whether there are any conflicts of interest

With a third-party special needs trust, any assets remaining after the death of the beneficiary may undergo distribution elsewhere. Often, the funds inside may go to the siblings of the individual with special needs. This is one example of how giving the trustee role to, say, a sibling of the beneficiary with a disability could lead to a conflict of interest. 

The extent of the responsibilities involved

Serving as a trustee takes time and effort. The trustee also needs to have broad knowledge of how trust distributions may impact eligibility for government benefits. The trustee also has to stick to a certain timeline and provide documentation to specific government agencies, so you want to be sure the person you name as trustee is fit to handle these and other responsibilities. 

Your first thought may be to name your beneficiary’s brother or sister as trustee over a special needs trust. In some cases, this may work well. In others, though, giving this responsibility to a sibling may not be wise or appropriate.