Over the decades, I’ve served as trustee of dozens of trusts, many of them special needs trusts. Over that time, I’ve learned that one of the best ways for trustees to make sure that trusts are well managed and serve the needs of beneficiaries is to hold annual meetings. This is especially true of special needs trusts.
All trusts require periodic accountings to beneficiaries. If the trustees have discretion over trust distributions, they must be aware of the circumstances of the beneficiaries. Communication among trustees and beneficiaries is vital to the smooth operation of trusts. The discipline of holding an annual meeting that includes the trustees, the beneficiaries, and the people managing the trust investments will go a long way towards reaching these goals. It is also likely to protect the trustees from future questions about their decisions.
Special Needs Trust Annual Meetings
Making sure annual meetings occur in the context of of special needs trusts is doubly important. Given the beneficiaries’ heightened needs, it’s crucial that trustees understand their circumstances and consider how they are likely to progress so that the trust can provide the most benefit both currently and in the future. In addition, it’s vital that the trust distributions do not disqualify the beneficiary from any public benefits such as Supplemental Security Income (SSI), MassHealth (Medicaid) or subsidized housing, that they might be receiving.
Annual meetings for special needs trusts often include more participants than those for other trusts. In addition to the trustees, beneficiaries and investment professionals, they might include family members, the guardian or conservator for the beneficiary, medical or other personnel caring for the individual, and a special needs planning attorney. The attorney is likely to be useful if eligibility for public benefits is a consideration.
What Should Happen at the Meeting
Every trust meeting, whether or not for a special needs trust, should cover the following topics:
- Accounting. The trustees should report on the status of the trust funds including expenditures and income over the prior year.
- Investments. The trustees or investment professional should report on how the trust investments fared over the prior year and what changes they recommend for the coming year.
- Check-in. The trustees need to learn about the beneficiary or beneficiaries’ status, what has changed for them recently, and their plans for the future. They should discuss the beneficiaries’ likely need for trust distributions over the coming year and beyond.
In many ways, the topics covered at a special needs trust annual meeting will be little different except that the check-in portion of the meeting is likely to be more involved and include more participants. In addition, in most cases it will include a discussion of maintaining eligibility for public benefits.
Any many cases, it may seem that the trustees and beneficiaries of trusts are in such constant communication that there’s no need for an annual meeting. But convening such a meeting is still very important, again more so in the context of a special needs trust. It may be the only time when all those involved meet together which allows them to step back and consider long-range planning as opposed to constantly responding to day-to-day needs.
If you’re a trustee of a special needs trust, make the annual meeting a regular part of your practice. It will help you better manage the trust which will make your life easier as well as enable you to better serve the beneficiary or beneficiaries. It will also improve communication and reduce the risk of second-guessing your decisions in the future. Those included in the meetings will feel they have been heard and will be less likely to question the decisions you make as trustee.