STEP 3 : IDENTIFY THE RIGHT TRUSTEES cont.
Ultimately, you, the creator of the trust (grantor), will decide the right type of trust, form of trust, and the appropriate trustees. The below check list may help in that analysis, and of course, reaching out to a professional to aid you in your planning is always a good idea!
| TRUST TYPE: 1ST, 3RD, OR BOTH | CONSIDER |
|---|---|
| My loved one has, or will have, assets of their own (in their name) in excess of $2,000: | 1st Party Trust |
| My loved one will be inheriting money from me or others: | 3rd Party Trust |
| Both of the above are true: | Both trust types |
| STANDALONE V. TESTAMENTARY | CONSIDER |
|---|---|
| My loved one may inherit money before I/we pass away (e.g., from grandparents) or | Standalone Trust |
| I/we do not want to disclose additional information to government agencies, financial institutions, or care providers, or | |
| I/we would like to be able to fund the trust before my/our demise, or | |
| I/we would like a more comprehensive trust with terms that are tailored to our family’s situation: | |
| None of the above apply to my family: | Testamentary Trust |
| INITIAL TRUSTEE SELECTION | CONSIDER: |
|---|---|
| My assets are below the federal estate tax limits (currently ~12MM for an individual or ~24MM for a couple, though this is changing), and | All of 4 of these are true: Parents as initial Trustee |
| My assets are below the state estate tax limits (varies by state), and | |
| I do not live in a state with an inheritance tax, or my intended beneficiary would not trigger the inheritance tax (e.g., beneficiary is your child), and | |
| There is nothing in my family dynamic that would cause conflict with parents serving as trustee: | |
| Any one of the above is false: | Professional Trustee |
| SUCCESSOR TRUSTEE SELECTION | CONSIDER: |
|---|---|
| There is an individual who has all the identified skills, is willing to serve, understands the workload and risks, and is an age-appropriate trustee for my loved one: | Individual Trustee |
| Our family dynamic would be negatively impacted by putting one sibling, or family member, in charge of another, or | Professional Trustee |
| I do not have someone who meets all the criteria, do not want to burden that person, or ask them to assume fiduciary risks or obligations: |
Key Takeaway
It is always recommended to speak with an attorney licensed to practice in your state, that has special needs expertise. A great place to start is with the Academy of Special Needs Planners (specialneedsanswers.com), Special Needs Alliance (specialneedsalliance.org) attorneys with the CELA designation, or Hope Trust (hopetrust.com).
The best time to start planning for your loved one is now. A holistic team of professionals, including lawyers, financial advisors, benefits experts, and care/support coordinators will ensure that your loved one is supported throughout your lifetime and beyond. •
ABOUT THE AUTHOR:
Joshua Fishkind, J.D., MBA is the CEO and a cofounder of Hope Trust, a full-service care planning company dedicated to helping families plan for their loved one with special needs, provide daily care management and support, and administer special needs trusts.