How to Select a Professional Trustee: 4 Questions You Should Ask
This article is a part of True Link’s Guest Expert Series. We have interviewed leaders knowledgeable in disability planning, Elder Law, and trust administration and will be sharing their expertise with you in a series of videos and posts. Note: this article is not intended to provide investment, legal, tax, accounting or medical advice. Before making decisions involving investing, legal, tax, accounting or medical concerns, you should consult appropriate professionals regarding your speciﬁc situation.
Selecting a professional trustee for a Special Needs Trust (SNT) is an important step in the estate planning process – and you want to get it right. Here are four questions you’ll want to ask when meeting with prospective trustees.
1. How much experience do you have working with SNTs?
Managing a Special Needs Trust requires knowledge and experience across a number of factors, as Ann Koerner, President and Founder of National Care Advisors explains. “Within the scope of managing a Special Needs Trust, this is a complex task. You have to be fully aware of Social Security rules; you have to understand how Medicaid works; you need to understand employment laws, if you're hiring caregivers. You have to understand investments."
Not every bank, trust company, or attorney understands these rules – you want to seek out a trustee who works with other SNTs and can provide concrete examples of their expertise. “It’s important to interview multiple trustees, to choose a trustee that has experience with all of the rules and the laws pertinent to a Special Needs Trust,” emphasizes Koerner.
2. Can I see a list of all fees and charges that a trust could incur?
Professional trustees will typically charge a set percentage of the trust's assets in order to manage the trust. But this may not be the only fee. “When you’re looking out there for trustees, you want to take a look at the fee schedule[...] You want to make sure you’re getting a good bang for your buck,” shares Charnise Mothershead, Chief Operating Officer of Secured Futures (a Pooled Special Needs Trust nonprofit organization).
Because many beneficiaries are receiving means-tested public benefits, they need to avoid receiving significant cash payments that could lead to a reduction in those benefits. To protect and maximize these public benefits, the trustee is often responsible for paying bills directly to service providers, as well as arranging for services and care. Some professional trustees may charge additional fees to complete these tasks, so you want to understand what is included in the overall fee and what may lead to further charges (e.g. for tax planning, brokerage services, billpay, hourly fees, etc.).
3. How do you incorporate the goals of the beneficiary into the planning process?
SNTs are created to maximize the quality life of the beneficiary, so it’s important that their goals, interests, and needs are considered when establishing a trust (also referred to as person-centered planning).
When interviewing prospective trustees you want to understand how they incorporate the wishes of a beneficiary and their advocates into the trust planning process. Yolanda Mazyck, Executive Director of Shared Horizons (a Pooled Special Needs Trust non-profit organization) explains her organization’s approach, “We do what we call a “Quality of Life” plan. And that Quality of Life plan is an opportunity for your voice to be heard as to how you see this trust benefitting you – whether that’s [for] you, your son, your daughter, or your grandchild [...]. From that information, we create what we like to think of as a ‘Living Budget.’”
4. What access do you provide to the beneficiary and their advocates?
You want to work with a trustee that will be responsive to the needs of the beneficiary and any questions you may have. It’s a good idea to know a trustee’s hours of availability, how quickly they will get back to you, and other communication needs before you engage their services. As Mothershead advises, “you want to be mindful of your access to the trustee. Can you call and does someone answer the phone, or, when you email, does someone email you back?”
Want to watch these videos on Vimeo? Here are the links to the guest expert videos related to this topic:
- SNT Administration: Professional or Family Member Trustee - Ann Koerner, President and Founder of National Care Advisors
- What to Look for in a Pooled Special Needs Trust - Charnise Mothershead, Chief Operating Officer, Secured Futures
- What to Plan for at the Beginning and End of Trust's Lifecycle - Yolanda Mazyck, Executive Director Shared Horizons