When you begin the process of special needs planning, one of the most important steps you’ll take is establishing a special needs trust. This legal tool helps protect a person with disabilities by allowing them to receive financial support without jeopardizing access to essential government benefits like Medicaid or Supplemental Security Income (SSI).
But setting up the trust is only half the equation. Choosing the right trustee — the person or entity who manages the trust — can make or break the plan you’ve worked so hard to create.
In special needs planning, the trustee isn’t just a financial manager. They’re a legal fiduciary tasked with protecting the best interests of your loved one while navigating complex rules tied to public benefits. Their responsibilities include making careful distributions, maintaining records, communicating with caregivers or family members, and ensuring the trust always remains compliant with federal and state regulations.
It’s a position that requires more than good intentions. It demands judgment, patience, and a deep understanding of the legal and practical aspects of disability planning.
Families have several choices when it comes to selecting a trustee, and each option has strengths and potential challenges.
Many people first consider a family member. Someone close to the beneficiary likely understands their personal needs, preferences, and daily routines. This emotional connection can be valuable, but it’s also important to assess whether the family member has the time, financial knowledge, knowledge of probate statutes, tax reporting, government entity reporting, expertise in public benefits, and emotional distance needed to manage the trust effectively.
Professional trustees — often attorneys, accountants, or trust officers — offer a different kind of value. With experience in special needs trusts, they bring a strong understanding of legal compliance and benefit protection. However, they charge fees and may lack the personal touch a family member can provide.
Corporate trustees, such as banks or trust companies, offer the most institutional stability. They follow strict procedures and are often backed by teams of experts. On the other hand, they may be less flexible and are usually only available for larger trusts with significant assets.
The best trustee is someone you can trust to follow your instructions, respect the needs of your loved one, and seek guidance when issues arise. While financial savvy is helpful, a willingness to learn and consult professionals can be just as important.
Longevity is another key factor. Will the person or institution be able to serve for many years? If not, do you have a successor in place?
Finally, communication skills matter. The trustee will need to interact with family members, care providers, attorneys, and possibly government agencies. Clear, compassionate, and professional communication helps avoid misunderstandings and ensures the trust functions as intended.
To create balance, some families appoint co-trustees — such as a family member alongside a professional. This arrangement combines personal insight with technical expertise, offering both emotional and legal support to the beneficiary.
You might also consider naming a trust protector. This is someone who can monitor the trustee’s performance and has the power to step in or make changes if needed. It’s an extra layer of protection that adds flexibility to your plan, and prevents court proceedings to modify the trust in response to changes in fiduciaries or the law.
Choosing a trustee based on loyalty or emotion alone can lead to trouble. Some families name a sibling or close friend who feels obligated to say yes but lacks the necessary time or knowledge. Others fail to name a successor trustee, which can create confusion if the primary trustee can no longer serve.
The biggest mistake, though, is choosing someone who doesn’t understand the interaction between the trust and public benefits. One wrong move — like giving cash directly to the beneficiary — could result in the loss of critical support programs.
You don’t have to make these decisions alone. A skilled attorney who focuses on special needs planning can help you structure the trust, select the right trustee, and build in protections for the future. This partnership ensures your plan reflects both your legal obligations and your family’s unique values.
Establishing a special needs trust is a loving and protective step toward safeguarding your family member’s future. Choosing the right trustee — someone who is capable, trustworthy, and informed — is one of the most important parts of that journey.
With thoughtful planning and professional guidance, you can feel confident that your trust will serve its purpose for years to come. Check out our webinar on avoiding costly mistakes in special needs trust planning to learn more.
Not all special needs trusts are the same. Learn when to use a first-party vs. third-party trust and how to plan effectively for your loved one’s future.
Protect your loved one’s government benefits with smart special needs planning. Discover how trusts help avoid disqualification from SSI and Medicaid.
Not all special needs trusts are the same. Learn when to use a first-party vs. third-party trust and how to plan effectively for your loved one’s future.
Protect your loved one’s government benefits with smart special needs planning. Discover how trusts help avoid disqualification from SSI and Medicaid.