Estate planning is a daunting challenge in families. It is even harder for families of a loved one with a disability. Arranging for a trust, trustee and trustee bond may be useful—and reassuring.
Start With a Letter of Intent
Every stage of life is more complicated for families in which someone has special needs. Securing healthcare, education, social and recreational opportunities and housing all require specialized knowledge, care and financing. The caregiver of a loved one with disabilities also faces extra concerns when confronting long-term well-being.
To help, the National Law Review offers estate planning tips for families of beneficiaries with special needs. A letter of intent is recommended as a first step. Prepared by those family members most closely involved in the care of the relation who has special needs, the letter of intent is a practical—not a legal—document. In as much detail as possible, it should summarize the interests, needs, routines and contacts of the loved one, and be updated frequently.
Establish a Trust
The National Law Review also recommends establishing a Special Needs Trust for the beneficiary with a disability. This type of trust is also referred to as a Supplemental Needs Trust or SNT. As explained by the National Law Review:
This specialized trust allows assets that family members and friends contribute to it to pay for goods or services that are in the beneficiary’s best interest, while also maintaining the beneficiary’s eligibility for means-tested government assistance programs. In planning for an individual with special needs, money is not everything — there may be residences or programs that require the person with special needs to be eligible for benefits such as Medicaid or SSI and do not accept private payment. A SNT allows the beneficiary to have the best of both worlds.
Keep in mind that a trustee will need to be appointed to oversee the trust. It is a good idea—and often required—for the trustee to obtain a trustee bond to protect the interests of the beneficiary. An expert with a long history in fiduciary bonds, Colonial Surety Company makes it easy for families (and their lawyers) to obtain a trustee bond. Colonial offers a direct to consumer, online approach. Licensed in all 50 states and US Territories, Colonial simplifies the bonding process: get a quote online, fill out your information, and enter your payment method. Print or e-file your own bond. It’s that simple. Learn more and obtain a trustee bond here.
Select The Trustee Thoughtfully
As a caregiver, there is probably nothing more important to you than ensuring your loved one is happy and well when you are no longer able to oversee their affairs. In fact as the National Law Review points out regarding trustee selection:
This is probably the most important and most difficult decision you will make in setting up a SNT. In selecting your trustee, the most important qualifications are loyalty and competency in administering the trust. The trustee is the quarterback of the plan who can hire financial advisors, attorneys, accountants, bookkeepers, social workers, and care managers. The trustee can delegate but must oversee everything. Corporate trustees are an option if the trust is large enough. Look for a bank with special needs experience and a willingness to administer an SNT. If you use a corporate trustee, consider adding an individual family member or friend as a co-trustee to work with the corporate trustee who has expertise in SNTs.
Remember, Colonial Surety Company offers a direct and digital way to obtain trustee bonds. We are the insurance company — which means no agent, no broker, and no middleman. We make it easy to obtain trustee bonds— instantly. Obtain a quote online, fill out your information, satisfy underwriting requirements, and enter your payment method. Print or e-file your bond from your home or office. Obtain a Trustee Bond Here.