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How Trustees Can Navigate Tricky Distribution Requests

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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.

When you’re responsible for approving discretionary distribution requests from a trust, there are a number of factors you need to consider before saying “yes” or “no.” This decision making can become even more complex when dealing with requests for things like medicinal marijuana or items related to relationships or sex – where personal preferences, moral judgements, and issues of legality are intertwined. 

But as tricky as some of these requests may be, trustees who want to maximize the wellbeing of their beneficiaries need to navigate them thoughtfully. In this article, we share recommendations from two guest experts on how they approach these decisions.

1. Take yourself (and your morals) out of the equation

As a trustee, guardian, or rep payee, you might not agree with what a beneficiary wants to spend their money on, but “it should never be the guardian or trustee or rep payees’ preference or choice that is the reason for saying no to the distribution,” shares Emily Smith, the Executive Director of Wyoming Guardianship Corporation (a Pooled Special Needs Trust nonprofit organization).

Smith provides this example, “Oftentimes we get requests that are of a sexual nature. People are interested in movies or magazines – things that sometimes people are squeamish of talking about or they don’t want to approve as a distribution,” Smith shares, “I think we always have to be mindful not to put our moral judgment about those items onto the person because that’s that person’s choice and that person’s preference.”

2. Understand why the request is being made

Megan Brand, the Executive Director of the Colorado Fund for People with Disabilities (a Pooled Special Needs Trust nonprofit organization), also finds that a trustee’s viewpoints and biases can come into play when reviewing requests for marijuana purchases. To avoid making decisions based on moral judgments, she encourages her team to clarify why the beneficiary is making this request.  

She explains, “Generally, we are looking at distributions for marijuana as a medical use, so that’s the way in which we would consider this request.” Ultimately, it is about the individual’s wellbeing; helping them manage chronic pain or their disability can be an appropriate reason to approve these types of requests.

3. Avoid assumptions 

When it comes to reviewing requests with a beneficiary’s best interests in mind, this might also require setting aside our assumptions about their interests and preferences. Smith notes that “people have a tendency to assume that people with disabilities are somewhat asexual, that they don’t have sexual preferences or enjoy things that we would assume [others] would want to enjoy. And I think that we put that onto them.”

Building relationships with your beneficiaries and establishing good rapport can help you uncover their desires and interests without having to blindly guess. Smith shares, “It’s really important to talk to the people you’re working with [...] and have open conversations about their sexual preference, their identity, and what they want out of life in that regard.” 

4. Know the laws and rules that are at play

Beyond the distribution guidelines outlined in the Social Security Administration’s POMS, some requests will need to be assessed alongside additional laws and regulations. This is the case for marijuana requests handled by Brand’s team at CFPD.

She recommends, “you have to look at your state rules in regards to marijuana and those are going to vary greatly state by state. Some have absolute prohibition, and other states like Colorado [...] it’s allowed for both recreational and medical use.” 

State laws aren’t the only factor that needs to be considered. “You need to think about where they are living,” explains Brand. “If they’re living in some type of federal housing, [...] there are going to be additional mandates.” There may also be rules around congregate living settings like group homes, or assisted living facilities – many have restrictions around marijuana being consumed onsite. 

Brand also encourages people to have an understanding of any employer rules: “Another important consideration is employment and knowing the employment rules if the person is working for a [national] employer that does not allow for medicinal use.” If the employer does have restrictions around drug use, it’s important to learn the details and talk through tradeoffs with the beneficiary. 

In addition to these recommendations, tricky distribution requests also need to meet the same standards as more typical distributions – is the purchase allowed by the trust, is it in the beneficiary’s best interest, and is it within budget. Combining these standard practices with the above recommendations can help you make the best decisions for your beneficiaries.

Want to watch these videos on Vimeo? Here are the links to the guest expert videos related to this topic:

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