One question that almost every guardian of a beneficiary of SSI, SSDI or Medicaid has is whether or not they can serve as a trustee on a third-party special needs trust in California. The answer to that depends on the situation and the ability of the guardian to effectively manage the entire estate and life of the person they are serving as guardian for; there are also legal aspects to consider. Here is a brief summary of what a guardian has to be able to do and what they need to avoid in order to effectively serve as a special needs trust trustee for their beneficiary.
No Express Prohibition
In reality, even with a special needs trust in California, there is no express prohibition on guardians serving as trustees on the trust in question. They must, however, be able to serve as a trustee and that requires several skills that if they lack them, their management will suffer.
Administrative Skills – There is a lot of paperwork and documentation requirements associated with just about every trust. If a person cannot manage those effectively, or even does not know about them, the chances of errors that might jeopardize the trust or harm the beneficiary increase.
Specialized Knowledge – Most families will name a family member as the trustee and that often can work if that family member possesses a basic knowledge of trusts, how they work and what their limitations are. If, however, someone has no idea on all three, they run the risk of making a mistake, which can be costly. A professional trust manager is paid to know those rules, regulations, criteria, stipulations, and limitations.
Interpersonal and Communication – Serving as a trustee does not come with constant social demands, but there are some. The person in question will need to be able to interact with everyone from external vendors to government employees. If someone is not a good communicator or loathes interacting with others, naming them as a trustee might not be a good idea.
Co-mingling of special needs trust funds and the beneficiary’s personal funds is a real risk with someone who does not understand how trusts work. There are trust, tax and finance implications that can hurt the beneficiary, even if the mistake or mistakes are the fault of the trustee if that happens. If there is no firewall between the two, this is not the way to go.
Administering a special needs trust California requires a special set of skills that not everyone possesses. If the skills mentioned here are not present in the guardian, it is best to seek professional trust management help.