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welcome everyone for those of you that do not know me my name is eric jorgensen i am the founder of special needs navigator i started special needs navigator to help families individuals and caregivers navigate the maze of benefits resources and services the today what i want to talk about is a question i get very very often from families i'm working with and that's how do we pick a trustee what if we don't know somebody or why shouldn't we use a family member the attorney wants me to give a name i don't know anybody unfortunately i don't have a ready answer as to who you should use i do give a lot of referrals to cumberland trust in tennessee c-u-m-b-e-r-l-a-n-d as well as hope trust h-o-p-e they're based in new jersey some other alternatives could be a local trust company it could be a bigger bank it could be a financial institution there's a lot of opportunities and a lot of different type of trusts trustees out there i am personally not a fan of family trustees but you know some people have had a lot of success with that what i'm going to talk about today is what is a trustee and in the pros and cons of family trustees professional trustees and corporate trustees and then in my mind there is a difference between a corporate trustee which is typically in my mind a bigger company like a financial institution a bank or something similar to that to a professional trustee which is usually an attorney maybe a sole proprietor or a partnership or something like that so in my mind there's a difference between professional and corporate i don't know if there is technically a difference this is just how i look at it the definition that webster gives is pretty wordy i'm looking at it and evidently my my closed captioning is is blocking out the definition basically to paraphrase it's a natural legal person to whom property is administered for the benefit of someone else and they have a lot of responsibilities and duties they pay any debts i mean you can see the slide there's a lot that goes into being a trustee some of them may also be required to manage the money so custodying the assets means placing the money in house and other assets or other physical things or financial things somewhere that's what custody means it means holding on to something that doesn't mean they have to manage the money they may outsource money management to a financial advisor or if they're a larger corporate trustee they may manage the money in-house so some if you're a family trustee the benefits are they really really tip know the individual typically it could be a sibling it could be cousin uncle but they really know the individual although they may charge fees i mean you are allowed to charge fees as a trustee they're probably less expensive than the other two options of a corporate or professional trustee and it can often be easier to get the money i mean they're probably more accessible may not be it depends on what's going on the the downside is it can be very very time consuming i mean it can be a full-time job there's a reason we have corporate and professional trustees because there's enough work to keep them employed the family member may not know everything that they're required to do they may not be familiar with the tax requirements or the filing requirements and more importantly they may not know what they are and are not allowed to spend money on from the trust if it's a cousin or an aunt or uncle how old are they are they the same age as the parents because if the parents die of old age then how old are the trustees going to be when mom and dad die so you you've got to take that into consideration if it's a sibling are they at an age where they might be having a family of their own and they really want to focus on raising their kids and they may not be in a place where they want to be a full-time trustee and like it or not you have to admit there may be some abuse because of lack of oversight there's not there have been too many cases i've seen where people sometimes meaning well sometimes not spend money from the trust that really truly isn't for them for the benefit of the individual with the disability and that's something you've got to factor in it doesn't mean that a corporate trustee or a professional trustee won't abuse it it's just there are more i believe safeguards in place to protect you if a professional or corporate trustee does a is abusing it so a professional trustee is going to be familiar with all those rules and regulations i mentioned they won't feel pressured to give the money away now that could also be a negative because maybe the individual asking for the money for a distribution let's say it's a 30 year old asking for legos you know the professional trustee may feel that's an unreasonable request but the family may be hey you know that is reasonable even though he's 30 he does enjoy legos you should make that distribution and that's where having a trust protector or co-trustee might be able to assist you and again i'm not an attorney talk to an attorney before you make these decisions i just want to put the information out there there may be more continuity so instead of worrying about oh if mom and dad die my aunt and uncle are about the same age as mom and dad who's going to take over in larger partnerships with multiple partners there may be continuity the problem is with smaller partnerships maybe two or three partners or me a sole proprietor there may not be that continuity it's something you have to be thinking about they may be specialized where all they do is serve as trustee for special needs trust and that that's that's there's a lot of power there there's a lot of good working with somebody who this is all they do they're going to be very very good at it you would hope they are going to be more expensive because they're attorneys they're professionals they're they've they've they've earned the right to charge more money because you're paying for all the accrued knowledge that they have and their time the as i mentioned they're probably not going to be too familiar with the beneficiary with the individual with disabilities and they may not be accessible they may not be available because they're a social a sole proprietor or one man show or one woman show they may not be available on holidays and weekends or when they're on vacation now i would like to think that many of these professionals will have con you know contingencies in place but these are things you would want to ask about when you're interviewing them and finally you have corporate trustees and these are going to be your biggest organizations they could be very large banks they could be trust companies things like that they're going to be again very familiar with all the rules and regulations most of them will offer some kind of professional money management where you don't have to hire a financial advisor you know just like i mentioned with the professional trustee they're not going to feel pressured to make a distribution but just like i said with their professional trustee because they don't know the individual with a disability they may decide not to make a distribution that a family member might say is yes this is absolutely okay so again you might want to look into putting a trust protector or co-trustee in there now with corporate trustees they have huge trust trust departments um oftentimes you know i'm thinking specifically very big banks where they'll have dedicated trust departments now you may never get to know an individual because you're bounced from a person or person every time you call you get a different person so the continuity may not feel like it's there but there's always going to be somebody available to manage the trust and you don't have to worry about any balls getting dropped because somebody's on vacation or something now again it is going to be more expensive and there may not be as accessible given holidays and weekends but i think they're probably going to be pretty accessible especially the bigger trust companies that focus on special needs trust administration i mean that's one of their prides and you can again do your homework look into what do their what are they like with customer service how available are they some of them are going to have minimum account balances meaning you have to have at least a million dollars of investable assets and when you think about this that may not be as big of a bar or as high of a bar as you're initially concerned because even if you only have two 100 000 or 200 000 in in retirement accounts right now if you have a million dollar life insurance policy that's gonna pay into the trust that's where you're gonna that's where your money's gonna come from um but again these aren't for everybody i've talked about pool trusts in a different video and so if none of the three that i mentioned here today are are attractive to you consider looking into a pull trust as always you can connect with me at special needs navigator dot us email at eric at special needs navigator dot us i have a podcast now abc's of disability planning where i'm interviewing professionals many of them are youtube videos that are on this channel just in a podcast format because frankly i think it's more enjoyable to listen to a podcast and just sit in front of a video for 45 minutes to an hour or whatever the length it is if you have a question concern or topic that you would like covered please email me eric especially navigator.us or leave me a comment in the comments section of these videos don't forget to hit subscribe and follow and i look forward to connecting with you in the future you