By Tampa Special Needs Planning Attorney, Laurie Ohall
Special Needs Trusts are put in place so an individual with special needs is taken care of in the event their primary caretaker can no longer do so. In order to ensure the trust funds are used properly, a trustee is chosen to be in charge of the Special Needs Trust which provides money directly to the beneficiary (the individual with special needs). The trustee pays directly from the trust for goods and services on behalf of the individual. While a parent may serve as trustee of the trust at first, a successor trustee is appointed to take on these responsibilities once the parent can no longer serve. This successor trustee is entitled to a trustee’s fee for their service.
There may be times when there is no mention of a fee in the Special Needs Trust, but the trustee is still entitled to payment if desired. Several factors are used to determine a suitable fee, either when the Trust is created or at a later point. To be sure, the complexity of the trust is a factor – if there are numerous investments in the trust that require a great deal of attention, for example, then it would be appropriate to pay the trustee for their time and expertise.
Another consideration is the type of services the trustee provides. If the Trust requires complex tasks like the investment management mentioned above, then the Trustee would be entitled to a higher rate than a Trustee who is only responsible for paying monthly bills. No matter the task, though, the trustee is responsible for tracking time spent and services provided to determine a fair fee.
If the trustee pays for a good or service out of their personal money, then they should be reimbursed by the Special Needs Trust. A receipt for money spent on the beneficiary’s behalf is required for reimbursement. This payment is separate from the trustee’s fee and would not be treated the same since the trustee’s fee is considered as income and therefore taxed as such. That being said, the fee paid by the Special Needs Trust is considered a tax deduction for the Trust.
Special needs planning lawyers continually look for better ways to serve their clients and provide for the future. If you would like to get more information about Special Needs Trusts and the role of a trustee, please set up an appointment at the Tampa area office of the Law Office of Laurie E. Ohall by calling (813) 438-8503.