Do You Understand Your Duties As The Trustee Of A Special Needs Trust?

Trustees owe a “fiduciary duty” to their beneficiary. These duties impose general obligations of loyalty, prudence and impartiality with respect to trust administration, but also specific requirements based upon the beneficiary’s circumstances. The trustee of a special needs trust (SNT) has all of the duties of any trustee, plus specific added responsibilities due to the special needs of the beneficiary, who is likely receiving mean-tested public benefits such as Medicaid or Supplemental Security Income (“SSI”).

When you contact Feldman & Feldman, Counsellors at Law, P.A., our experienced attorneys can help you understand your administrative duties and obligations as well as your rights as a trustee. We’ve been serving clients in the South Florida community for more than 30 years.

An Overview Of Trustee Responsibilities And Expectations

All trustees are responsible for:

• Appropriate investment of trust property
• Proper titling of assets
• Bookkeeping and accounting of trust transactions
• Obligations imposed by court order or other oversight requirements
• Providing annual (or more frequent) accountings/disclosure of trust activity to the beneficiary
• Proper tax reporting for the trust, including obtaining an EIN number (if necessary), as well as preparing and filing any necessary federal or state tax returns, and providing any necessary distribution forms (K-1) to the beneficiary
• Make appropriate distribution of trust property to the beneficiary, taking into account both current and future needs

On top of these responsibilities, the trustee of an SNT should also:

• Ensure distributions from the special needs trust do not negatively affect the beneficiary’s eligibility for public benefits
• Notify Social Security and, if required, the state Medicaid agency, of the existence of the trust within the required timeframe for reporting
• Provide accountings to, as required, to any appropriate government agencies
• Work with the beneficiary, family members, care managers, social workers or others as appropriate to ensure the beneficiary’s needs are met
• Upon termination of the trust, ensure proper winding up of trust assets, including any necessary payback to the state Medicaid agency before making other required distributions to successor beneficiaries

The above duties are not all-inclusive, and a trustee who fails to properly administer a trust can jeopardize their beneficiary’s eligibility for public benefits and expose themselves to liability for breach of their fiduciary duty. It is therefore vital that every trustee either become knowledgeable about their obligations as trustee and seek the advice of a special needs attorney withh respect to their responsibilities.

Have Questions? Contact Our Estate Planning Lawyers For Answers.

If you’d like to better understand your role as the trustee of a special needs trust, contact Feldman & Feldman, Counsellors at Law, P.A., and speak to one of our experienced attorneys. We offer personalized advice and guidance backed by decades of experience. To get started, call our Coral Springs office at 954-228-6074 or reach out online.