Administering a Special Needs Trust – A Handbook for Trustees
“Special Needs” trusts are complicated and can be hard to understand and administer. They are like other trusts in many respects—the general rules of trust accounting, law and taxation apply—but unlike more familiar trusts in other respects. The very notion of “more familiar” types of trusts will, for many, be amusing– most people have no particular experience dealing with formal trust arrangements, and special needs trusts are often established for the benefit of individuals who would not otherwise expect to have experience with trust concepts.
The essential purpose of a special needs trust is usually to improve the quality of an individual’s life without disqualifying him or her from eligibility to receive public benefits. Obviously, one of the central duties of the trustee of a special needs trust is to understand what public benefits programs might be available to the beneficiary and how receipt of income, or provision of food or shelter, might affect eligibility. Because there are numerous programs, competing (and sometimes even conflicting) eligibility rules, and at least two different types of special needs trusts to contend with, the entire area is fraught with opportunities to make mistakes. Because the stakes are often so high – the public benefits programs may well be providing all the necessities of life to the beneficiary – a good understanding of the rules and programs is critically important.
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