By S. Paul Prior, Esq.
A Special Needs Trust (SNT) is a critical part of an estate plan for families of an individual with a disability. If created properly, a SNT will preserve eligibility for various government programs for individuals with disabilities.
A SNT will operate for the life of the disabled beneficiary. In some cases, this can mean 50 years or more. Usually, a SNT is funded after the death or incapacity of the parents. Many of our clients have asked whether there is a way to ensure that the SNT will be used effectively. The following concerns have been specifically raised:
- Can you be sure that the trustees will perform their job properly?
- Will they invest trust funds the right way?
- Will they stay informed about the needs of the person with a disability and spend trust funds accordingly?
- Or, will they become distracted and not follow through on their responsibilities?
Appointing a corporate trustee, like a bank, may not solve these problems because it may fail to put the beneficiary’s needs ahead of corporate interests and be reluctant to spend trust funds for the benefit of the disabled individual.
Appointing a Trust Protector can help to alleviate these concerns. A Trust Protector is not a trustee, but rather a person or corporation with authority to review the trustee’s performance. Hinkle, Fingles & Prior has been serving as Trust Protector to many clients for the past several years.
Once the trust is funded, the Trust Protector will do the following:
- Meet at agreed-upon intervals of time (e.g., every two years) with the disabled beneficiary to observe the conditions under which he or she is living and to determine if his or her needs are being met;
- Review the administration of the trust to determine whether it is consistent with the disabled person’s best interest and governing laws;
- Review how the funds are invested and spent to determine whether the trustee is in compliance with the law;
- Seek the removal of any trustee by a court, if there is cause to do so, and arrange for the appointment of a suitable successor trustee; and
- Help protect the best interest of the disabled beneficiary and the trust.
For more information on our Trust Protector services, contact us today.