A cautionary article in Forbes, “Trusts, Special Needs Trusts, Family Offices All Need Integrity Monitors But Don't Know It,” examines the value of having an “Integrity Monitor,” an individual with the knowledge and skills needed to add a layer of fiduciary protection for the trust and its beneficiaries. An Integrity Monitor should have the investment management industry and forensic expertise needed to prevent any wrongdoing with the administration of the trust.
If you don’t have a financial expert in money management malfeasance dedicated to overseeing the investment program of your trust, you may be taken advantage of daily throughout the lifetime of the trust.
It is common practice for major companies, agencies, and governments to hire “inspector generals” to oversee their operations and prevent the occurrence or reoccurrence of illegal or unethical business practices, as well as to detect fraud. Courts and regulators also often require that such a monitor be placed within a company to prevent future abuses as part of a legal settlement, when the company has engaged in past wrongdoing. So, why shouldn’t you have an “inspector general” for the trust you have set up for your special needs child?
This should be a no-brainer decision to make. There’s no reason to wait until something goes wrong. Add another layer of independent protection to your special needs trust. It is relatively inexpensive to do and the potential to prevent or head off financial harm will be more than worth the cost. An additional layer of protection could be hiring a CPA or an attorney versed in what distributions can and cannot be made from a special needs trust. This is critical so that the special needs beneficiary remains eligible for governmental benefits. We recommend using attorneys who are knowledgeable in SSI and Medicaid eligibility rules that can monitor or serve as trustee on special needs trusts.
Consult your estate planning attorney and financial planner. They will help you in making sure you have the appropriate levels of protection.
At Family Estate Law Planning Group, we have an ongoing Client Care Program because we believe that your estate plan should be continually tracked overtime. We will work with you to align, verify and track assets. We help with initial alignment of assets with the plan, then work to ensure assets are properly aligned and receive verification from your financial institutions. This process is especially important for families with special needs children, as any inheritance that goes outright to a special needs child will jeopardize the child’s governmental benefits.
For more information on planning for special needs individuals and our Client Care Program, explore our website and contact us to schedule your consultation today!
Reference: Forbes (January 30, 2018) “Trusts, Special Needs Trusts, Family Offices All Need Integrity Monitors But Don't Know It”