A trustee of a Special Needs Trust must develop a working knowledge of the government benefits for which the beneficiary is qualified, because the trustee must understand which distributions are appropriate and which are not. This can mean not making certain distributions, such as cash to an 5Sf beneficiary, as well as making other distributions, such as purchasing plane tickets. A Special Needs Trust trustee must know the long term care plan for the beneficiary, her life expectancy, and what activities are possible or are reasonable to expect. A trustee of a Special Needs Trust should be creative in anticipating activities or items that will enhance the beneficiary’s life. For example, a beneficiary who is totally physically disabled, and who requires 24 hour care in a nursing home, but who is not totally mentally disabled, might
6 enjoy a trip to the zoo or to a play. The cost of such a trip may include the cost of a personal companion. A Special Needs Trust trustee must understand which distributions would jeopardize the
benefits being received. For example, an 581 beneficiary receives cash payments that are deemed to be for the recipient’s food, clothing, and shelter. The receipt of any additional cash, or any item that would be “in-kind support and maintenance,” will reduce the 5Sf benefits. Therefore, the trustee should not pay the beneficiary’s rent or buy a coat for the beneficiary, because those are in kind payments for shelter and clothing. Under some circumstances, it is in the beneficiaries best interests for distributions to be made that will reduce 551, but this must be done with careful consideration and in accordance with the terms of the trust.
The 881 program requires periodic reporting for all 881 recipients. Eligibility will be denied if the reports are not complete. The existence of the Special Needs Trust must be reported. Additionally, if the beneficiary changes address, gets married, obtains more resources or more income, or improves in medical condition, these changes must be reported. The report is