by Karen B. Mariscal
is often the most difficult decision our clients have to make. It can be even harder than choosing a guardian for a minor child, because the guardian, hopefully, will never have to serve, while the trustee almost certainly will.
Being a trustee can be a difficult job. The trustee’s duties include making proper investments, paying bills, keeping accounts, and preparing tax returns. And the job of trustee of a special needs trust is particularly fraught because the role could last a lifetime.
But a trustee must be chosen, and we try to reassure our clients with the following: That whoever serves can always hire people to help, such as accountants and investment advisors. That the clients can change the trustee in the future if they want. That the trustee can always resign. Eventually the decision gets made, and our clients sleep better at night.
By way of background, the law isn’t very strict about who may serve as your trustee, as long as the person is legally competent, meaning he or she is over 18 years of age and is capable of managing his or her own affairs. The main considerations when selecting a trustee are picking someone who is trustworthy, will stay involved, will seek help as needed, and can make
sometimes difficult decisions. The trustee has a duty to manage the trust in the beneficiary’s best interest. The trustee does not need legal or financial expertise, but he or she must have good judgment.
Another consideration is that the trustee be able to manage the trust for an extended period of time. Your choice of trustee should be someone who will likely be around for a long time and who has the time to devote to trustee duties. It is important that the trustee be of sound mind and body. If you don’t know anyone who meets these qualifications, you can look into hiring an independent trustee. This can be an individual or an institution such as a bank or trust company, a professional trustee, an investment advisor or manager, an investment banker, an accountant or a lawyer. In addition to being independent, a professional trustee will usually have experience and expertise in managing trusts. If you aren’t comfortable with having a stranger manage the trust, it may be possible to choose a family member and a professional trustee as co-trustees. The downside to hiring an independent trustee is that the trustee will charge a fee, which is usually a percentage of the trust, but this is generally well worth the benefits professional trustees provide.
We are often asked whether the trustee and the guardian should be the same person. Personally I did that, because I wanted my sister, who is going to be in charge of my autistic and sometimes very difficult son, to have the money to deal with him without the extra hassle of having to ask someone else for the funds. But often people pick someone different, because for example one family member is more nurturing, and the other more financially savvy.
Or they want to keep both sides of the family involved, so they name the mother’s relative as the trustee, and the father’s relative as the guardian, or vice-versa. Or, for other reasons – each situation is different. Whomever you choose as trustee, it is important to reevaluate your
choice every few years. The person who is right today may not be right tomorrow. Your attorney can help you determine who is the best trustee for you.
For more information about special needs trusts, contact Karen B. Mariscal, Esq. at kbm@margolis.com
