Special Needs Trust - professional trustee or family member?

[Anonymous]

This is actually a question related to an adult with special needs, but I imagine some parents here have experience related to special needs trusts: When setting up a special needs trust, is it best for the trustee to be a family member or someone who is hired as a professional trustee?

I can see how a family member would be more invested in the person's needs. In this case, I would be the appropriate family member, but I am concerned with having little to no spare time to manage the trust and wanting it to be done appropriately.

Our situation is that my brother has some special needs and still lives at home with my father. Brother and I are both around 40. My mother passed away and we are getting organized in terms of estate planning and planning for brother's care. My father is not great with admin stuff so he's not a good choice for the trustee.

Thanks for your insights.

[Anonymous]

Family member. We talked to several attorney/trustees (very little money involved) and the reality is they do very little for the clients and seemed very wasteful with money - i.e. buying a tv to spend the allotted money vs. new clothing etc.

[Anonymous]

We have a family member do it. The SN adult lives in a group home near the family member who oversees the trust. More time is spent driving, visiting, outings with the family member than on administering the trust..

[Anonymous]

Thanks PPs. If there isn't a family member who can do a reasonable job of it (small family - it would be me - I am drowning in my current obligations), any advice on what to do or how to find a good professional trustee? I'm just really in a tough spot with this choice.

[Anonymous]

Family member (even if you have to pay fees to outsource tasks.) Perhaps include some kind of clause in case you have to hire a professional trustee short term as backup.

You can outsource CNA's when needed. You can outsource an RN to stop by. You can outsource shopping. You can do medical appmts remote. You can outsource cooking.

We've had huge problems with professional trustees in the past where they charge huge sums of money and don't do much of anything. It is very difficult to get them taken off.
Generally there has to be malfeasance of some kind that you can prove.

[Anonymous]

Anonymous wrote:Family member (even if you have to pay fees to outsource tasks.) Perhaps include some kind of clause in case you have to hire a professional trustee short term as backup.

You can outsource CNA's when needed. You can outsource an RN to stop by. You can outsource shopping. You can do medical appmts remote. You can outsource cooking.

We've had huge problems with professional trustees in the past where they charge huge sums of money and don't do much of anything. It is very difficult to get them taken off.
Generally there has to be malfeasance of some kind that you can prove.

Thank you for this insight, PP!

[Anonymous]

Family member. Being the trustee is not a huge lift. Everything else involved in caring for your brother is what will be time-consuming and emotionally exhausting, but being the trustee is easy.

[Anonymous]

I would make yourself the trustee and then if you don’t have a good family member to be second in line, a corporate trustee in case something happens to you.

You don’t have to manage it yourself. You can in your role as trustee hire a professional to manage it, but you as trustee can hire or fire that trustee.

[Anonymous]

Anonymous wrote:Thanks PPs. If there isn't a family member who can do a reasonable job of it (small family - it would be me - I am drowning in my current obligations), any advice on what to do or how to find a good professional trustee? I'm just really in a tough spot with this choice.

You don’t want a corporate trustee assigned as trustee. You want to be trustee and then HIRE someone else to manage it.

[Anonymous]

Anonymous wrote:I would make yourself the trustee and then if you don’t have a good family member to be second in line, a corporate trustee in case something happens to you.

You don’t have to manage it yourself. You can in your role as trustee hire a professional to manage it, but you as trustee can hire or fire that trustee.

This makes sense - thank you!

[Anonymous]

I think you need to separate “being a trustee” from “who does the actual caregiving.”

Being the trustee usually just means handling the money and should not be a huge lift.

The bigger issue is “who does the caregiving and how much caregiving is going to be required?” Your post is too vague for us to know what level of support your brother will need. But this is what you need to focus on. Sure, you can hire caregivers, but they don’t show up, brother falls in the middle of the night, etc.

My kid will end up in a Medicaid intermediate care facility. What she will need is someone trustworthy to stop in and make sure her care isn’t abominable. The reality is that her care will likely never be “great” in this type of facility. But I need someone there regularly to hopefully notice if she is being abused, not fed, not having her diaper changed, etc.

[Anonymous]

OP - WE have adult daughters now in early 40s married with middle schoolers, jobs and basically a busy life like yours. So now as we update future planning documents, it is "real" and not some hypothetical idea of the future. In our case, we are viewing that there will be three persons involved in the future for our two daughters, their sister and us, their parents. In your case, this is also the time to get things as much as you can in line with your dad. I agree that having a family member as the trustee is the optimal goal. However, there are times when a co-trustee of a lawyer (part of a group rather than a sole practitioner for continuity) or bank might be best. And I think depending on the circumstances of the family member trustee be open to listening to them about the kind of resources one might want. It could be such things as an accountant to be sure all financial expenditures are handled correctly/taxes on the SNT filed etc, a service set up to bill pay for the disabled person, a representative payee appointed to handle incoming monthly benefits checks/wages if one is working, etc.

Again, appointing a trustee for a Special Needs Trust is only one aspect of future planning. There are online resources such as The Arc which actually has a FREE online future planning portal that provides information on topics to consider and could be a workspace to develop a document over time. Also, the Special Needs Alliance is a good, FREE website to learn about the various aspects of SNTs. You can also receive a FREE newsletter written by lawyers on current topics related to the SNT. An important aspect is to be sure you work with an experienced lawyer in setting up the SNT.

[Anonymous]

I've been a special trustee for one family member who has now passed away, and am current trustee for another. As the others have mentioned, the trustee is really just the money person. All the care decisions our routine care have nothing to do with the trustee, unless it's about writing a check to pay for them.

You can do it if it's just that, then get a CPA to do the tax filings as they are complicated for trusts.

If you are in MD, you can ask By Their Side for advice https://bytheirside.org/ and also the local ARC and your county disability services admin.

[Anonymous]

I serve as the Trustee for my sister's Special Needs Trust. I agree designating a family member is the way to go, but definitely look into services that can help you. Right now, I am doing it myself, but at some point I am going to outsource the day to day work. I found both the Arc and PLAN to be really helpful resources. I do want to share a perspective that I have not seen in the other responses. It is a stressful and exhausting role. My sister has multiple mental health and substance abuse problems which leads her to overspend on a regular basis. I am constantly having to say no to requests for more money. I suspect she has a massive amount of unpaid credit card debt. This is a hard role because while you are responsible for managing the resources in the Trust, it doesn't give you authority to manage the beneficiaries' expenses. You would have to seek guardianship for that. Anyhow, for families considering having your child serve as a Trustee for their sibling, please know this is a very difficult and hard role. I don't think or parents or I really understood what I would be getting into. I know now.

[Anonymous]

I forgot to add in a prior post about us looking at options for two sisters supporting their younger sister in the future as we are unable to do so, there are Some other points to consider:

- See if the agency which may be providing just Case Management or Adult Day Program services at this point to a family member is able to become the Guardian or the Representative Payee. If the agency is or will be providing direct support to one living in a supported housing manner or a group home, then at least being the representative payee might make sense. In some communities such agencies to take on some specific services for an individual with a disability might be the local mental health agency serving adults, the local developmental disabilities agency serving adults, The Arc etc.

- There are also independent agencies such as IKOR nationally which can serve in various capacities for any person with life care issues that at least in our areas has a strong reputation. I had heard a local presentation and then found it was a national group. Of course, you always need to do careful research on who is running a local program. It is an option that one could begin with specific services as needed and then add to if confidence is built or simply have as a resource in a crisis. Welcome to IKOR – Life Care Management Solutions. Since 2016 we have been providing life care management solutions to seniors and individuals with disabilities. Together through a holistic, interdisciplinary team of Registered Nurse Advocates, Client Care Specialists and other professionals, we are the central point of contact our clients turn to for managing their medical and non-medical life care needs. By promoting independence, safety and wellness, our goal is always to improve the overall quality of life for our clients. This or similar agency could serve the interest of a person with a specific disability of any age or any person as they age and need support.

- For families of younger children and teens, it is important to consider having a will and guardianship plan in place for all children under 18. Then the next critical juncture is what do you do when your oldest is 18 and could technically become responsible for younger siblings. We had things set up with levels of estate executor, guardians, POA and Health Care directives for several years as out two older girls went to college/grad school, started careers, married and had young families. Now with them in early 40s, we are looking realistically that they are established and willing to support their sibling in the future. However, the question remains who would be best suited to serve in which role? What can we do to make any transition now while we are still in good health and fully capable to reduce the burden when things are not so??

- For us we happen to get LTC insurance 20 years ago, so we have very generous plan options for ourselves. BUT the catch is beyond using it to cover in-home care or adult day care programs, we can't look move to a CCRC while we are still very active or doing so if one needed Assisted Living or Memory Care and the other wanted to be in same complex because a disabled adult child could not go in most cases until age 62, though in some cases 55. The reality is that most adults with a developmental disability who need some level of daily supervision or support do live with their parents or a family member. So, while friends in our age range are able to look at aging options based upon their lifestyle, health issues and finances to reduce the impact on their adult children, we do not have this flexibility in planning.

- For younger families, if you have a son or daughter, who will need the adult services funding of what is called a Medicaid Waiver, while your adult child might qualify as public education ends, it is important to understand that you may have mobility in retirement, but your adult child with a disability will not as a Medicaid Waiver is not portable between states.