Protector Powers in Trusts for the Disabled
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In some family situations involving disabled children, a trust protector might be given the power to make changes or direct the trustee to take actions necessary for compliance with new laws or frequently changing rules. Attorneys who work with these families find this flexibility extremely useful and important. There are onerous restrictions on the benefits a disabled person can receive from a trust and still qualify for state assistance with housing, medical care, and so on.
In a carefully designed special-needs trust for a disabled beneficiary, a protector can be authorized to make changes in the trust in response to changes in the eligibility rules for government benefits. This can be critical, because unfortunately, prohibitive care costs and the unavailability of insurance for them usually make reliance on public assistance a financial necessity. The laws and regulations in this area are changing constantly, and no one can predict far in advance all the rule changes that might necessitate changes in the trust document.
From “AARP Crash Course in Estate Planning: The Essential Guide to Wills, Trusts and Your Personal Legacy,” by Michael T. Palermo, JD, CFP, 2005, p. 132.
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