4 Responsibilities of a Special Needs Trust Trustee

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A special needs trust is created when someone wants to provide money to a special needs loved one without affecting their government benefits, such as Supplemental Security Income (SSI), Medicaid, vocational rehabilitation, or subsidized housing. When one of these trusts is created, a trustee is appointed to manage the property. This is an important position that includes a number of responsibilities. Here are four responsibilities of a special needs trust trustee.

Make Distributions from the Trust

The trustee that is appointed for a special needs trust is responsible for the distribution of the property within the trust. The trustee should have an excellent understanding of the terms of the trust to ensure that the property is being distributed properly. This understanding will ensure that each distribution is authorized under the terms of the trust. It’s also important to understand how the distribution will affect the government benefits a beneficiary is eligible for as improperly distributing the property could result in the beneficiary losing these important benefits.

Invest the Trust Property

The trustee of a special needs trust won’t directly invest the property but is in charge of ensuring that the property is invested well. In most cases, qualified financial professionals will make the investments but the trustee will meet regularly with financial professionals to discuss potential investment opportunities. They are also in charge of making sure that the risk of the investment is appropriate for the growth of the trust.

Tax Reporting

Each year, state and federal tax returns must be filed on behalf of the special needs trust and it is the responsibility of the trustee to ensure that the returns are filed. These returns are usually quite complicated so an accountant is often required to prepare them but it’s the responsibility of the trustee to ensure they are done on time and correctly.

Communication

Given the financial responsibilities of the trustee, it’s important that they keep in constant contact with the beneficiary and their caregivers. The trustee is responsible for coordinating payments for many services, such as housing and medical care, and keeping in touch with the beneficiary and those around them will provide assurance the trustee is appropriately distributing the property. This could also avoid potential lawsuits should the beneficiary or those around them not be notified of how the property is being distributed.

A special needs trust is set up to provide financial protection for someone with special needs without negatively affecting government benefits. A special needs trust trustee is in charge of said trust, holding several responsibilities.

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