Are you the parent, guardian, or caretaker of a loved one with disabilities? If so, you understand just how scary it can be to think about that individual’s future should you pass away or become incapacitated.
One of the best ways to ensure that your disabled loved one is well taken care of after you are no longer able to care for them yourself is by creating a special needs trust.
The purpose of this trust is to establish your goals for your special needs child/parent/etc and connect them with the documents and financial assets necessary to achieve those goals.
One of the most common questions sounds something like, “How do I know for sure that the wishes established in my trust will actually be carried out properly?”
This fear of uncertainty is totally normal. Luckily, with proper planning, there are people you can set in place even beyond your typical trustee designation that serve to ensure your loved one is taken care of exactly as you specify in your trust.
Who manages a special needs trust?
One of the most crucial decisions the donor (the creator of the special needs trust + supplier of the funds) will make is designating a trustee.
The trustee is responsible for managing and overseeing the trust after the donor either passes away or is otherwise unable to oversee the trust him/herself. Responsibilities include managing the distribution of the trust’s assets to the proper beneficiaries, investing the trust’s assets in accordance with the donor’s wishes, and paying any taxes/bills on the trust. Not only that, but the trustee is required to do all of this while keeping in mind the best interests of the beneficiaries.
In any other case, if the trustee was failing to act within his or her fiduciary duty, the beneficiaries themselves would be able to raise a dispute against the trustee or at least seek legal counsel. However, in the instance of a special needs trust, it’s very common that the beneficiaries are not able to supervise their own trustee given the nature of their disabilities.
This is where a trust protector comes in.
What is a trust protector?
A trust protector is an individual designated by the special needs trust’s donor to monitor the trustee’s decisions. This role was created to hold the trustee accountable — ensuring all of the donor’s wishes are being carried out properly and the beneficiaries are protected.
What are the rights and responsibilities of a trust protector?
In most cases, the donor will grant the trust protector access to all of the accounts within the trust. This allows the protector to monitor any and all financial activity made by the trustee.
If the protector does find that the trustee is breaching his or her fiduciary duty (whether intentionally or not), the protector usually reserves the right to fire the trustee, and sometimes they are even able to name a new trustee on the donor’s behalf if a back-up was not already listed within the trust.
Keeping family involved.
Because special needs trusts are so complicated to manage, many family members are concerned that they may not be able to fulfill the duties of a trustee. Also, many parents and other donors of special needs trusts do not want to burden their family members with the responsibility of managing these trusts. Yet they know that their family will know the beneficiary better than a professional trustee. A trust protector who is a family member could provide that communication between the beneficiary and the trustee.
The trust protector may also be standing in the role of guardian or in the circle of care for the beneficiary. And the trust protector will have an understanding of what the beneficiary’s needs may be on a year to year basis. He or she can be so helpful in setting in a budget and in communicating preferences.
Does every special needs trust require a trust protector?
Just as every special needs family is different, every special needs trust is different. The best way to decide if your special needs trust should include this designation is to speak with your qualified special needs planner.
Learn more about special needs trusts and how they can benefit you here.
Planning for your loved one with special needs requires extensive research to become a well-educated advocate and secure their future. You will want to keep up-to-date on the latest medical, educational, financial, and legal changes. Special Needs Law Group of Massachusetts, PC provides assistance to you and your family in addressing your unique concerns. For more information and assistance, contact our legal services team today.