Making sure their loved one is cared for in the future is top of mind for many families. Selection of the right fiduciary to serve as trustee of a Third Party SNT can bring peace of mind. For families living in Washington, Oregon, and Idaho, it is important to find the right financial institution to serve as Trustee after they can no longer care for their loved one.
What Is a Special Needs Trust?
A Special Needs Trust is a specialized trust designed to protect means-tested benefits eligibility for individuals living with a disability. Two of the most common means-tested public benefits are Medicaid and Supplemental Security Income (SSI). Funds in the trust are managed by the trustee and can be used to pay for items and services not covered by public benefits. In addition to Third Party Special Needs Trusts, there are also First Party Special Needs Trusts (usually funded with funds from litigation such as a personal injury settlement), and Pooled Special Needs Trusts which may only be administered by a trustee that is a non-profit.
Choosing a Trustee
While a family member can serve as Trustee, an individual may not have the training, background or expertise to properly administer the trust. When a Third Party Special Needs Trust is not administered correctly, it can result in ineligibility for benefits, regulatory and legal requirements being overlooked, or the needs of the individual living with a disability not being addressed. Unlike an individual, a Corporate Trustee has the knowledge and experience to properly administer the trust, meet the legal and regulatory requirements, and be there for the beneficiary during the course of their lifetime.
For example, Martin and Karima live in Washington State and have a son, Omar, who is on the autism spectrum and receives means-tested public benefits. Omar is a computer whiz, and knows everything there is to know about gaming systems, but he is unable to manage his money and is easily influenced by others. His parents want to ensure he’s financially secure after they can no longer care for him.
With the help of a Third Party Special Needs Trust drafting attorney, Martin and Karima set up a SNT for Omar’s benefit that can be administered in the future by a Corporate Fiduciary. The trust will protect his eligibility for means-tested public benefits and allow the funds in the trust to be used for supplemental quality of life expenses such as assistive technology, medical and dental care not covered by benefits, education, companion care, emotional support animals, music or art therapy, recreation, entertainment and travel. The Corporate Trustee will ensure the terms of the trust are followed, taxes are filed, statements are provided, that Omar is connected with professionals such as care managers, attorneys, and tax preparers. The Corporate Trustee will also review distribution requests to ensure discretion is properly exercised. Using a Corporate also helps minimize the conflicts that can occur when a family member services as Trustee for another family member.
When planning for the future of a loved one with a disability, establishing a special needs trust (SNT) is often a crucial step. But just as important as setting up the trust is choosing the right trustee to administer it.
Here are some key points to consider regarding the benefits of hiring a naming a Corporate fiduciary:
Benefits of Using a Corporate Trustee to Administer a Third Party SNT
- Compliance with SNT Rules and Following Best Practices:
SNTs come with detailed legal and regulatory requirements. An experienced Corporate Trustee will ensure compliance with the terms of the trust and best practices in SNT administration. - Knowledgeable Financial Management:
A Trustee must invest and manage the trust assets prudently, keeping them diversified and growing, to meet the beneficiary’s needs over the long-term. Professional trust companies have systems and expertise for handling investments, taxes, and distributions efficiently. - Recordkeeping & Reporting:
Trustees must keep detailed records of every transaction, file any required annual accountings to the courts or benefits programs, and provide the beneficiary with periodic statements.A Corporate Trustee has systems in place to provide required documentation and record keeping. - Personalized Service:
The right Corporate Trustee offers a relationship, not just a transaction. Working with a company that takes the time to understand the beneficiary’s unique needs and family context offers peace of mind. - Continuity and Reliability:
Unlike an individual trustee who may become unavailable due to age or health, a trust company provides ongoing stability and professional oversight for all trust matters.
What to Look for When Selecting a Company to Administer a Third Party SNT
- Experience with SNTs and current law across Washington/Oregon/Idaho
- Dedicated compliance and legal resources
- Transparent fee structures and clear communication
- Proven investment and recordkeeping capabilities
- Commitment to beneficiary-centered service
Choose the Right Corporate Trustee for Your Trust
Entrusting the administration of a Third Party SNTto the right company isn’t just a financial choice, it’s a commitment to your loved one’s security, independence, and quality of life for years to come.
If you’re considering your options, seek a team with genuine expertise and a heartfelt understanding of your family’s unique journey.
With over 35 years of experience in trust and estate administration, and a deep-bench of compassionate and professional trust officers, Northwest Trustee & Management Services would be honored to serve you and your loved ones. Reach out to a member of our team with questions or to learn more.