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trust protectorsTrust Protectors in Special Needs Trusts

Special Needs Trusts are structured to provide disabled beneficiaries supplemental income while not disqualifying them from needs-based governmental benefits. As with any trust, provisions may be made to preserve the goals of the trust creator. Laws change and so might the needs of a disabled person. How can one structure a trust to respond to these variables?

Trust protectors are individuals or committees that may be included when forming a trust. Why would a trust protector be important in a Special Needs Trust? A trust protector can be appointed powers to amend the trust, change the situs to a more favorable state, “watch over” the trustee to ensure responsibilities are met, add additional beneficiaries, and more. Special Needs Trusts with a trust protector enjoy more control over:
Beneficiary’s interest. An individual or advocacy committee named as trust protector can ensure distributions are made according to trust terms and that the trust terms support the well-being of the beneficiary. Trust protectors can stay updated on the beneficiary’s condition and lifestyle to ensure basic care needs are satisfied.

Trustee duty review and removal/appointment. Annual, quarterly, or more frequent reviews can help a trust protector determine if the trustee is properly following trust terms for distributions. Not only can this help ensure distributions are made for qualified expenses, but that the costs of these expenses are reasonable. If a trust protector finds a service provider is overcharging, this allows the opportunity to find cost-effective alternatives so that the trust distributions are used effectively. If the trustee is abusing their powers, the trust protector may appoint a new trustee.

Tax and legal benefits. State laws affecting taxes, special needs persons, or public benefit programs may change outside the trust’s current jurisdiction. If those changes are favorable, the trust protector can move trust administration to a more advantageous jurisdiction provided the trust has a sufficient connection with the new state, such as new state being the current residence of the beneficiary or trustee.

Our special needs planning lawyers draft comprehensive trusts to help individuals in North Carolina, Florida, New York and Tennessee protect the best interests of a disabled family member’s immediate and long-term needs.