From state to state, different policies govern special needs trusts. Because of this, the special needs trustee overseeing a trust for the beneficiary must be aware of these policies that affect the distribution of the trust. Professional guidance is often advised when distributing trust funds, in order to make sure minimal negative potential impact is incurred and that benefits to the beneficiary are maximized.

When distributing trust funds, it must be done solely for the benefit of the client and be in this client's best interest. Setting reasonable expectations with the client and beneficiary early on is a good idea so that he or she knows how funds will be distributed to help them.

If the client is receiving governmental benefits for income, housing, medical benefits and food, the trust can only be a supplement, not a replacement, as in the case of an emergency. If there is an emergency affecting the well-being, safety and health of the beneficiary, trust funds can be used to ensure that he or she is cared for. However, this can offset eligibility for governmental benefits and that is why all programs and resources available must be used to meet the client's needs before distributing the trust.

If an adult beneficiary is living with parents, the SSI check will be reduced to reflect that the beneficiary is housed there. The loss of financial support in the check is outweighed by the benefit of being in the care of the parents.

Overseeing special needs trusts can be tricky. Take care to choose a reliable special needs trustee who will distribute the trust wisely when necessary.

Read more about special needs trusts.