When looking for a professional trustee, you should find someone who understands all public benefits, particularly Medicaid and SSI. Since Medicaid rules can differ by state (but cannot be any more restrictive than SSI rules) it is best to find a trust in the state where the beneficiary is going to reside. At least for the time being in New York, local districts still handle recertifications, so having a trustee with a relationship with your local Department of Social Services is also helpful. You also want a trustee with clear, upfront fees. Trusts that will nickel and dime you for every piece of paper that they mail end up costing you more money over time.
Just as important in knowing what to look for in a trustee, is what to avoid.
Avoid a trustee who will tell you that your subaccount is “just like a bank account”. It should not be. The only reason that SSI and Medicaid do not consider the trust assets to be available to you is because another party (the trustee) is excersing discretion in disbursements. If the trustee fails to meet its fiduciary obligation and instead provides the beneficiary unfettered access to the funds, you run the risk that the Social Security Administration may void the trust agreement in the future.
Avoid trustees that will not respond to requests for information from Social Security, or the Department of Social Services. We had a local Medicaid examiner tell us that he has had to discontinue Medicaid on behalf of beneficiaries of a New York State trust that will not provide verification of the trust deposits. You should have an on-going relationship with your trustee and be able to depend that the trust will provide the information you need to retain your public benefits.
Avoid a trust that does not require receipts or a paper-trail. Social Security can and does ask for verification of disbursements months or years after the fact. If your trustee cannot provide this proof, you may be subjected to an overpayment, and/or discontinuance. Also, your trust should be independently audited. Although having a bank as a financial trustee is required, a good accounting practice require checks and balances.
There are now many pooled trust options throughout the county. Be sure that you ask the right questions and utilize a professional trust which will be able to meet your needs in the long-term.
By Karen L. Nicolson, Esq. CEO
Disclaimer: This blog post may be considered attorney advertising in some jurisdictions under applicable law and ethical rules. This blog post does not establish an attorney-client relationship, nor is it intended to give legal advice.