There are a number of rules, guidelines, and regulations that family members need to follow when acting as trustee. But with all the responsibilities you’re juggling, it can be hard to keep track of everything you need to be doing to stay compliant. Here are some suggestions we’ve heard from others in your position and those acting as professional trustees.

1. Consult the right experts 

While the role of trustee does mean you are the final decision maker for most aspects of trust administration, you do not have to make these decisions in a vacuum. Here are some of the experts you may want to consult:

• Elder Law Attorneys: These attorneys are typically hired during the process of drafting a trust, but they also have expertise in benefits planning, long-term care management and other legal matters related to people living with diminished capacity. Depending on other factors, you may want to consult additional attorneys with different expertise – such as an employment lawyer, if you’re hiring and paying a caregiver from the trust. 
• Investment Advisors with trust experience: In accordance with the Uniform Prudent Investor Act (or “UPIA”) “a trustee may delegate investment and management functions” (UPIA § 9). The Act goes on to direct that the trustee must exercise reasonable care in selecting an investment advisor to manage the trust’s assets. If you are acting as the trustee of a “wasting trust” where expenditures from the trust (for the beneficiary’s benefit) are rapidly depleting the trust’s balance, you’ll want to choose an investment advisor with experience in these types of vehicles. These assets may need to be managed differently than those invested to build wealth.  
• Accountant or Tax Professional: In addition to helping with annual accounting support, these professionals can make suggestions on how to reduce the trust’s tax liability, avoid common mistakes, and navigate potential audits by state or federal tax bureaus. While you can work with a CPA to help you, as trustee, file the trust’s taxes, it is a good idea to find a professional who understands the complexities of trust accounting.

2. Maintain good records

Recordkeeping is an important part of any trustee’s job. Maintaining accurate, timely records can help you:

• Show that you’re following the guidelines of the trust;
• Provide a record of purchases that supports your loved one’s use of public benefits;
• Produce timely court-required filings; and
• Respond to questions about whether you are fulfilling your role as trustee. 

Financial records are particularly important when it comes to tax filings, court reports, and maximizing public benefits. Some trustees use a spreadsheet in Microsoft Excel or Google Sheets or accounting software like Quickbooks or Quicken. Others rely on robust trust administration tools like the True Link Platform that allow you to set a budget, pay bills, disburse funds, attach receipts, and more without having to switch between multiple tools. 

And documentation isn’t just about numbers and financials, it can be a good idea to write down and save written copies of other information such as: the details of your processes (e.g. how disbursements are approved), copies of communication with the person you care for, and notes from meetings with government agencies (e.g. Social Security, Medicaid, Federal Housing) or other family members. Keep these documents in one place like Google Drive or Dropbox and make sure you choose file names that make it easy to find what you’re looking for and provide access to for your successor. 

3. Stay on top of your responsibilities

Even the most experienced professional trustees rarely manage all aspects of the role on their own. There are a number of tools they rely on to help streamline their processes and operate within the laws of trust administration. 

As a trustee, there will be tasks you’ll want to do monthly (e.g. checking the trust balance, transferring money to an ABLE account, or paying bills) and annually (e.g. filing court reports, submitting records to your accountant, or budgeting). This is where a to-do-list app like Todoist, Google Tasks, or Microsoft To Do can be helpful. Use the recurring task feature to make note of important deadlines and set up notifications to remind you ahead of time. 

4. Help a loved one follow the rules 

While it is your responsibility as trustee to follow the rules and guidelines governing trust administration, it is often the day-to-day actions of your loved one (who is the trust beneficiary) that impact whether these rules are followed. For this reason, it is critical to have clear lines of communication and do what you can to maintain a trusting, transparent relationship with them while you are their trustee.

Professionals recommend that you begin by explaining the limits and rules of the trust and why it is so important that you work together to stretch these funds to last as long as possible. Some trustees will write out a list of dos and don’ts and provide a printed version that fits in their loved one’s wallet or can be accessed from their phone – you want to make it easy for them to abide by the guidelines

Even when a loved one is an avid rule follower, mistakes can happen. And when it comes to Special Needs Trusts (SNTs) in particular, failing to follow the rules can result in a reduction of public benefits. That’s why many trustees turn to the True Link Visa® Prepaid Card for their loved ones. Using the True Link Visa Card platform helps the trustee manage where funds can and can’t be used – like blocking restaurants and grocery stores as purchasing food with SNT funds may compromise government benefits. 

In fact, the Social Security Administration¹ provides guidelines in their Program Operations Manual System (POMS)² for using the True Link Visa Card to make disbursements from SNTs. Learn more in our Compliance Guide.

5. Stay informed about changes in trust administration and benefits programs 

Throughout your time as trustee it is likely that rules will change, income caps will adjust, benefits payouts will increase, and some aspects of trust law will be re-examined. So it’s important to stay informed about these changes. Here are some resources you may want to explore:

• The SSA’s list of POMS Policy Updates: To view recent changes to The POMS – the primary source of information used by Social Security employees to process benefits claims. 
• The Special Needs Alliance: A collective of attorneys focused on special needs planning. Their website also provides articles, book recommendations, and other resources for individuals with disabilities and their families.
• The Arc: A nonprofit organization that advocates for human rights of people with intellectual and developmental disabilities (I/DD) and supports their full inclusion in the community. Local chapters provide programming and resources for the I/DD community on housing, healthcare, employment and more, many of which are available online or virtually.
• ElderLawAnswers.com: This website from the Academy of Special Needs Planners offers a number of free resources and FAQs related to elder law, estate planning, healthcare, and more.  

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Being a trustee for a relative or a friend can be difficult work, but this role is vital to a loved one’s life. Please reach out to us if there’s anything we can do to help support you. 

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¹Not associated with or endorsed by the Social Security Administration or any other government

²Learn more at truelinkfinancial.com/compliance

This article is not intended to provide investment, tax, or legal advice. Before making decisions involving investing, legal, tax or accounting concerns, you should consult appropriate professionals regarding your specific situation.

All investing involves risk, including the possible loss of principle you invest, and past performance does not guarantee future performance.

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