Needing a Special Needs Trust

I have five wonderful daughters. All were adopted through the state foster care system and all have varying degrees of emotional issues. Four of them are now adults. Three are functional citizens. But one is not. Her emotional issues are such that she has been receiving Supplemental Security Income (SSI) since she was 19.

This raises estate issues for me.

In my will, I have left the bulk of my estate in equal shares to my five children. But because the one child receives SSI, her share is in a Special Needs Trust (sometimes called a Supplemental Needs Trust). Why? Well, if I didn't put her share into a Special Needs Trust, she would lose her SSI, Medicaid and other benefits that she needs. Besides that, although she is bright and independent, she is hopeless with money. Anything I would leave her would likely be gone within a year.


The Special Needs Trust was easy--a two page document that is imbedded in my will. I chose an Elder Law specialist to draw up my will which included the Special Needs Trust. A general probate attorney could have done so as well.

The most difficult issue was picking a trustee.

I chose not to make any of her sisters the trustee. My daughter has Severe Borderline Personality Disorder which makes all relationships problematical. I didn't want to do anything that would jeopardize the tenuous relationship between the sisters.

Fortunately, my state offers me a solution. We have a statewide Special Needs Foundation that will, for a nominal annual sum, be the trustee. I am curious how this will all work out with my daughter, though obviously I won't be around to find out. Most of the Foundation's clients are developmentally delayed or have specific mental illnesses such as schizophrenia. But my child has a personality disorder. When one meets her initially, she appears to be bright (which she is) and normal (which she is decidedly not). I expect her to spend a lot of energy trying to get at the money and the poor trustees spending an equal amount of energy fending her off.

Here are a couple of informative links about Special Needs Trusts.

http://www.nsnn.com/frequently.htm

http://www.fragilex.org/html/financial.htm