Families of children with special needs are faced with a very difficult decision — after the parents are gone, who will watch out for their child who can’t watch out for themselves? Oftentimes, this question is coupled with — should a family member be trustee of the Special Needs Trust? (We have covered the topic of “trustee” extensively on our blog. Just type “trustee” in the blog search box to pull up those articles for further reading.)
Are siblings really the best choice?
It is often assumed that siblings will take on this role. While this is a common solution that works for many families, we would encourage you to ask the following questions:
- Is brother or sister the BEST helper for the special needs person?
- Who, no matter the biological connection, will best serve the complex needs of this person after I can no longer manage and advocate on their behalf?
While one would hope that siblings would oftentimes have the best interest of their special needs brother or sister in mind, there are a few things we urge families to consider:
- Putting brother Robert in charge of his sister Katie’s money introduces new complications to an already complicated sibling relationship.
- By choosing a sibling to act as a Special Needs Trustee it means that person is managing what will one day become their future inheritance. No matter how ethical or upstanding someone may be, this can create a messy conflict of interest.
So WHO would make the BEST trustee?
Sometimes it’s better to look beyond familial connections to find the person who can act in the best interest of the person with special needs. Acting as an SNT Trustee can often feel like a full-time job. When someone is an SNT Trustee, they must learn how distributions from the trust might negatively impact SSI or Medicaid benefits.
Trustees will also need to be organized enough to interact with government agencies, meet those agency deadlines, and “fight” through the bureaucracy on their beneficiary’s behalf to make sure benefits are preserved, delivered, etc. In addition, trustees will need to feel comfortable seeking the advice of multiple professionals such as financial advisors, tax advisors, and attorneys. SNT Trustees must be able to clearly communicate with, and listen to, these advisors.
3 Important Questions to Ask a Sibling
Three of the most important questions to ask of a potential sibling trustee are:
- Are they familiar with public benefits programs?
- Does the trustee have time to do the job properly?
- Can they lead a team of advisors to make the best decisions for the SNT?
If you ultimately do decide to go with a brother or sister as the SNT Trustee, it is a good idea to hire ongoing counsel to help them. For some families, it may end up costing less to hire a professional trustee who can perform all of these duties (benefits specialist, tax advisor, financial advisor, attorney, etc.) rather than hiring 3-4 separate advisors to assist the inexperienced sibling. It is often a better idea for the sibling to act as co-trustee alongside the professional trustee to make sure there is a close family member still involved in decision-making.
More reading on the topic:
Here at The Bell Law Firm we regularly help families with special needs planning, and as a part of that process we serve as a guide to help them make good choices when it comes to choosing an SNT Trustee and other “helpers.” Our experience helps families think through details they might not otherwise think of, as many families only make this sort of choice once in their life.
We help many families every year to navigate this tricky path. Give us a call at 913-345-2323 if you have questions about Special Needs planning, or if you’d like to get started creating a Special Needs plan. In the meantime, feel free to learn more on the Special Needs section of our blog.