By Steve Dale
It may be counter-intuitive, but when considering trustees for your child’s special needs trust (SNT), naming a sibling – or another family member – is not a good idea. Having them on the front line for day-to-day activities could be a disservice to everyone involved. A more successful model, instead, casts them in an oversight role, ensuring that the trustee acts in the beneficiary’s best interest.
Professionally managed trusts are almost always less expensive and more effective than family-managed trusts for the following reasons:
- Understanding of public benefits
- Stewardship of investments
- Knowledge of tax law
- Familiarity with breadth of available services
- Ability to remain objective
The stress of managing an SNT frequently takes a toll on family relationships and may even affect a sibling trustee’s health. Honest mistakes that hold dramatic consequences for a loved one with special needs can lead to anxiety, anger and guilt.
It’s far better to empower siblings and other family members to act as an advisory committee, monitoring a team of professionals that’s led by the trustee and, ideally, includes a care manager. Such an advisory group could define the distribution plan, amend the trust as conditions change, and, if necessary, replace the trustee.
As government benefits shrink, private industry is increasingly seeking to fill the gap. The family-monitored special needs trust, in response, is morphing into a personal social service system with its own checks and balances. The energies of siblings and other relations are more appropriately harnessed in an advocacy and supervisory role than in day-to-day execution.