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Special_Needs_Estate_Planning

  Focus on Selecting a Trustee?

A good Trustee is critical to a successful plan. The Trustee of an SNT has extremely broad discretionary powers and authority. Trustees can be the parents or grantors themselves, siblings, trusted family members and good friends of the family.  Banks or other financial institutions can also provide a professional to act as trustee.

It is suggested that if possible the best choice would be a sibling or family member together with a corporate trustee to serve as co-trustees.  The corporate trustee would have the primary oversight of the management, investing and accounting of the trust assets.  The sibling or family member would provide the needed intimacy with the beneficiary's needs and circumstances.

Another option is to make the SNT part of a pooled trust if the trust is being funded by the beneficiary. (Here is an example of a pooled trust or learn more about them.)

Some things to consider in selecting the trustee:

  • Will the person(s) be responsive and attentive to the needs of the beneficiary?
  • Are there possible conflicts of interest? (such as siblings who are also trust remainder beneficiaries)
  • Is the prospective trustee capable of good financial management?
  • Any tax implications to be taken into account?
  • Can you afford the fees for professional management?
  • Can you afford to not have professional management?
  • The possibility the person selected could experience significant life changes, e.g. divorce, moving far away
  • You should make provisions for compensation? It can be a lot of work.
  • Co-trustees, a corporate trustee with a family member to provide professional management balanced by someone loyal to and familiar with the beneficiary.
  • Trustee successors
  • Trust Protectors to oversee the trustee’s performance, and to replace the trustee where appropriate

Continue to The First Step - The 80% or Basic Plan

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The above information is provided to educate in a general way and is not intended to provide specific legal or professional advice.

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