Trustee for supplemental needs trust

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Froggy87
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Joined: Sun Sep 10, 2017 6:31 am

Trustee for supplemental needs trust

Post by Froggy87 » Sun Sep 10, 2017 2:11 pm

Hi, I'm new to this site and to investing but I'm hoping for advice. I recently learned that my father put a provision in his will to put all of my sisters inheritance into a supplemental needs trust and named me as the trustee. When it comes to finances my sister and I couldn't be more different. The only debt I have is my mortgage and I save roughly half of my pay each week and I've watched my sister blow through 40K in 3 months. Does anybody have any suggestions for me for researching exactly how I'm supposed to handle her finances? Currently she's expecting me to handle her finances the way I handle mine but she's also expecting annual vacations and to keep our father's home so she'll have a summer and winter home. The inheritances will be approximately $180K for each of us. Thanks for any help or ideas.
May your pockets be heavy and your heart be light, may good fortune follow you each day and night. ~Irish Blessing~

Nutmeg
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Joined: Wed Jul 26, 2017 12:52 pm

Re: Trustee for supplemental needs trust

Post by Nutmeg » Mon Sep 11, 2017 12:22 am

Step one in researching how to serve as trustee involves reading the trust document carefully. It may specify reasons distributions can be made.

Step two is to consult with the attorney who drafted the trust document. The attorney probably charges an hourly rate, about which he or she should inform you in advance. You can reduce the amount of time the attorney spends with you (and therefore your cost) by having written questions prepared in advance.

Also, are you certain that the type of trust your father created is a supplemental needs trust? A supplemental needs trust is designed to provide benefits to a person with a disability to cover expenses that are not covered by public assistance such as Medicaid and Social Security. This doesn't seem consistent with a situation in which someone takes annual vacations, owns a house already, and has had $40K to spend in the last three months.

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celia
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Re: Trustee for supplemental needs trust

Post by celia » Mon Sep 11, 2017 1:12 am

Froggy, Has your father died recently?
Does your sister have a disability?
Do you have a copy of the will/trust?
Could you be referring to another kind of trust, maybe a Spendthrift trust, for someone who can't control his/her spending?

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FIREchief
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Re: Trustee for supplemental needs trust

Post by FIREchief » Mon Sep 11, 2017 1:25 am

People can nominate others to do many things through their wills. While the thoughts and intentions may be noble, they generally (always) are not legally binding and only provide options to those so nominated (one option always being to just do nothing). If you discussed this with your father, and wish to help execute his wishes, then you may wish to accept the role as trustee. That said, from what you have described, many of us would run the other way.....
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Froggy87
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Joined: Sun Sep 10, 2017 6:31 am

Re: Trustee for supplemental needs trust

Post by Froggy87 » Mon Sep 11, 2017 4:34 am

I'm positive this is a supplemental needs trust. My sister owns her home from before she was determined to be disabled. Her disabilities are not physical and the 40K she blew through was from a 401K at her last employer, which means outside of SS this inheritance will be her only source of funds. And yes, my father is currently alive but has been diagnosed with inoperable cancer.

Appreciate all the replies and help. Guess I'll make an appointment with the attorney. Thanks.
May your pockets be heavy and your heart be light, may good fortune follow you each day and night. ~Irish Blessing~

Nutmeg
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Joined: Wed Jul 26, 2017 12:52 pm

Re: Trustee for supplemental needs trust

Post by Nutmeg » Tue Sep 12, 2017 10:17 am

Froggy87 wrote:
Mon Sep 11, 2017 4:34 am
I'm positive this is a supplemental needs trust. My sister owns her home from before she was determined to be disabled. Her disabilities are not physical and the 40K she blew through was from a 401K at her last employer, which means outside of SS this inheritance will be her only source of funds. And yes, my father is currently alive but has been diagnosed with inoperable cancer.

Appreciate all the replies and help. Guess I'll make an appointment with the attorney. Thanks.
Thanks for the additional information! That makes sense, and I am glad that you are seeking legal advice.

If you wish to do background reading to prepare for your meeting with the attorney, you might want to see:

http://www.beagleandassociates.com/wp-c ... ustees.pdf

It is possible that a similar resource is available for the state in which the trust is being formed. Federal law governs federal benefits, of course, but state law governs the trust.

Is it possible that in the past three months your sister was purposely spending down assets that would count toward federal benefit asset limitations by purchasing exempt resources?

Froggy87
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Joined: Sun Sep 10, 2017 6:31 am

Re: Trustee for supplemental needs trust

Post by Froggy87 » Tue Sep 12, 2017 5:47 pm

My sister knows nothing about protecting assets. She spent down the money (years ago) on frivolous stuff. Dinner out every night, weekends away with friends and that sort of stuff.

Thank you so much for the reference material, I'll read up before I visit with the attorney.
May your pockets be heavy and your heart be light, may good fortune follow you each day and night. ~Irish Blessing~

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CABob
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Re: Trustee for supplemental needs trust

Post by CABob » Tue Sep 12, 2017 5:53 pm

In addition to talking with the lawyer who prepared the document, since your father is still with you I suggest you have a conversation with him to find out what he intended with the will and trust provision.
Bob

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