What To Do After Establishing A Third Party Special Needs Trust
Establishing a third-party special needs trust is a major step in providing for the needs of an individual with disabilities. Special needs trusts are complex and may be difficult to understand and administer.
Once the trust documents have been signed, the trust has been initially funded, and the trust legally exists, what’s next in the lifespan of a special needs trust?
After the creation of a special needs trust, contributions in the form of funds and assets may be made to the trust. Many forms of financial assets may be contributed to the trust account, including cash, IRAs, stocks, mutual funds, CDs, and property.
Why Is It Important?
Anyone interested in helping the trust beneficiary may contribute to the trust account. It’s not restricted to family members, relatives, or friends of the beneficiary. It requires a minimal amount of paperwork in most cases to designate assets for contribution to a trust.
While the beneficiary of a special needs trust may not directly access the trust assets, it is the responsibility of the trustee to manage trust assets and allocate funds for the benefit of the beneficiary when necessary. A trustee is not precluded from amending or modifying the trust in limited ways, especially to enhance program eligibility for the beneficiary.
The beneficiary may request funds from the
trustee, which is subject to the trustee’s decision to release the funds to pay directly to third parties. Prudent management of trust assets is one of the trustee’s primary responsibilities. It can often be challenging for a family member acting as trustee to refuse a beneficiary’s request for funds.
Another Option
An alternative to placing a family member in this tough situation is to appoint a professional trustee to manage the special needs trust. The expertise of professional trustees lies in the management of trust assets. They possess the objective decision-making skills to know and understand when it is proper to grant a beneficiary’s request for funds.
Overall
A special needs trust is a cost-effective tool that may provide and protect the resources necessary to support your child’s future needs.
However, establishing a special-needs trust may be challenging and time-consuming. We offer specialized guidance to those who want to provide for their child’s future needs with the expertise to help you create a special needs trust that accomplishes all your specific goals.
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