Managing a special needs trust (SNT) requires a unique skillset, balancing fiduciary duty with the beneficiary’s specific needs and maintaining eligibility for vital government benefits like Supplemental Security Income (SSI) and Medicaid. While individuals can serve as trustees, many families find the complexities overwhelming, leading them to consider institutional trustees, specifically bank trust departments. These departments offer professional administration, continuity, and a deep understanding of the regulations surrounding SNTs. However, it’s not a one-size-fits-all solution, and understanding the pros and cons is crucial before making a decision. Approximately 65% of families with special needs children express concern about long-term financial security, highlighting the need for robust trust management.
What are the advantages of using a bank trust department?
Bank trust departments bring several benefits to SNT administration. They offer dedicated trust officers experienced in navigating the intricacies of special needs planning, ensuring compliance with the Supplemental Security Income (SSI) and Medicaid guidelines – vital for preserving the beneficiary’s public benefits. These departments also provide a degree of impartiality that can be beneficial, especially if family dynamics are complex. Continuity of service is a significant advantage; unlike an individual trustee who might become incapacitated or move away, a bank will remain as trustee for the duration of the trust. Furthermore, they offer robust record-keeping and accounting practices, essential for transparency and potential audits. A recent study by the National Academy of Elder Law Attorneys indicated that professionally managed trusts are 30% less likely to face disputes than those managed by individual trustees.
What costs are associated with bank trust administration?
While the expertise of a bank trust department is valuable, it comes at a cost. Fees are typically calculated as a percentage of the trust assets, usually ranging from 1% to 3% annually, but can vary. These fees cover administrative expenses, investment management, accounting, and legal compliance. It’s crucial to understand the fee structure thoroughly, including any hidden costs or potential for increased fees as the trust assets grow. Some banks may also charge hourly rates for specific services, such as coordinating medical care or addressing complex legal issues. It’s vital to compare fees across different institutions and consider the value of the services provided in relation to those costs. “We once consulted with a client who was shocked to discover that their bank’s trust fees were eroding the trust principal faster than the investment returns were growing,” recalls Steve Bliss, an Estate Planning Attorney in Wildomar.
What happened when a family didn’t properly manage a special needs trust?
I remember a case where a mother, Sarah, appointed her well-intentioned but inexperienced brother as trustee of her son, Michael’s, SNT. He wanted to do right by Michael, but lacked the financial expertise to manage the funds effectively. He made a series of poor investment choices, and, unaware of the strict income limits for SSI and Medicaid, he used a portion of the trust funds to purchase a new van for Michael, thinking it would improve his quality of life. Unfortunately, this disbursement immediately disqualified Michael from receiving crucial benefits, leaving him without essential services and significantly impacting his care. The family was devastated, and it took considerable legal maneuvering and a substantial financial penalty to reinstate Michael’s eligibility. This situation underscores the importance of professional trust administration and understanding the complex rules governing SNTs.
How did things work out when a family followed best practices?
Conversely, I worked with the Henderson family, who proactively appointed a bank trust department as trustee of their daughter, Emily’s, SNT. Emily has cerebral palsy, and her parents wanted to ensure her lifelong care without jeopardizing her benefits. The bank trust officer worked closely with the family to develop a comprehensive spending plan that addressed Emily’s needs – therapy, specialized equipment, and recreational activities – all while remaining compliant with SSI and Medicaid regulations. The trust officer also coordinated with Emily’s care team, ensuring her well-being was prioritized. Years later, Emily is thriving, receiving excellent care, and enjoying a full life, thanks to the meticulous management of her SNT. The Henderson’s foresight and commitment to professional trust administration provided peace of mind, knowing their daughter’s future was secure. According to recent surveys, families who utilize professional trust administration report a 40% higher satisfaction rate with the overall management of their loved one’s SNT.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
estate planning
living trust
revocable living trust
family trust
wills
estate planning attorney near me
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “Can I use estate planning to protect assets from creditors?” Or “Can I avoid probate altogether?” or “How do I make sure all my accounts are included in my trust? and even: “What is a bankruptcy discharge and what does it mean?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.