Estate Planning

Selecting The Right Trustee For A Third-Party Created and Funded Special Needs Trust Is Important.

By David M. Goldman

The trustee of a third-party created and funded SNT is given complete discretion in making distributions to or for the benefit of the special needs child. Thus, who should serve as the trustee of a third-party created and funded SNT is important.

The selection of the trustee involves many considerations, including the trustee?s ability to understand and respond to the needs of the special needs child; the trustee?s knowledge of government benefit programs and the effect that trust distributions will have on the special needs child?s government benefits; the trustee?s health, integrity, reliability and financial acumen; the trustee?s potential for a conflict of interest if the trustee is a current or remainder beneficiary of the trust; the potential for adverse income and transfer tax consequences if a family member serves as a trustee and is also a current or remainder beneficiary of the trust, etc.

Caution: Due to SSI and Medicaid rules and for various tax reasons, neither the special needs child nor his or her spouse should serve as trustee of either a third-party or first- party SNT.

Full post as published by Florida Estate Planning Lawyer Blog on January 13, 2009 (boomark / email).