what is the best form of investment for special need trust?

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seattenighthawk
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Joined: Fri Sep 24, 2021 6:07 pm

what is the best form of investment for special need trust?

Post by seattenighthawk »

Context: I have a special need son and want to set aside a portion for asset for him. I am also looking into a SNT for him.

I have trust account(UTMA) and 529 set up for my other kids. I am looking for suggestion on what are the best forms of investments to keep aside to finance the SNT for my disable kid in future.

Appreciate all the suggestions and tips from the community.
Best,
Dad of a Autistic Kid from Seattle, WA
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Johnsson
Posts: 415
Joined: Mon Jul 17, 2017 2:28 pm

Re: what is the best form of investment for special need trust?

Post by Johnsson »

Taxes in these trusts aren't cheap.

My mom has money set aside for my sister (at my suggestion), to ultimately go into a SNT.

VTMFX - Tax managed balance fund.. would be my choice

I made it a little harder on us by splitting it between... VWIUX - Int term tax exempt and VTSAX - Total stock market (50/50).

I don't know if this is the best answer or not. Please let me know what you decide... it's always good to hear another opinion.

YMMV

P.S. I asked this same question a couple years ago and heard crickets.
'In theory there is no difference between theory and practice. In practice there is.' Yogi Berra
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3CheersforLkyJack
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Joined: Mon Mar 25, 2013 7:32 pm

Re: what is the best form of investment for special need trust?

Post by 3CheersforLkyJack »

Most don't fund a supplemental trust until they pass due to the tax rates on trusts. For our special needs son we have increased our Roth contributions while also saving in a taxable account in our names. We also have a 529 Able. We want money in stocks now as it will be decades before the funds are needed so we want them to grow. We haven't really considered what investments will be used inside the trust once we pass and the trust is funded.
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Johnsson
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Joined: Mon Jul 17, 2017 2:28 pm

Re: what is the best form of investment for special need trust?

Post by Johnsson »

Johnsson wrote: Wed Oct 13, 2021 7:00 am Taxes in these trusts aren't cheap.

My mom has money set aside for my sister (at my suggestion), to ultimately go into a SNT.

VTMFX - Tax managed balance fund.. would be my choice

I made it a little harder on us by splitting it between... VWIUX - Int term tax exempt and VTSAX - Total stock market (50/50).

I don't know if this is the best answer or not. Please let me know what you decide... it's always good to hear another opinion.

YMMV

P.S. I asked this same question a couple years ago and heard crickets.
To put my response in context... my mom is a good 91 and sister is 65. The funds could be needed at any time, so even though they are not yet in the trust, we have deployed them like they are already in the trust and are setting aside dividends as cash for possible short term needs.

The trust has been created but won't be funded until mom passes.
'In theory there is no difference between theory and practice. In practice there is.' Yogi Berra
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