What if no one wishes to take over a Trust Fund?

[Drake3287]

Long story short, I'm the Trustee of my adult brothers Special Needs Trust (SNT) which was set up after my parents passed away. This brother has a long history of both mental health and past drug related issues including homelessness. He's currently living with a roommate in a lower-end apartment. He's also on SSDI and various state welfare benefits.

I'm almost at the end of my rope in dealing with both him and this money. No other sibling or relative would ever agree to take this over from me. My question is, what happens if I give up the position of being the Trustee? Who would take over the responsibly of dealing with both him and this Trust money? Obviously I'll need an attorney if and when it comes to this but I'd love to know how this all works. I'm guessing the state or county must step in.

 

[Texas Proud]

Read the trust... it should have language in there that spells out what happens...


I would assume you would need to find a bank or trust company that was willing to do it... but it matters how much money you are talking about as they need to make a profit.

 

[RetireeRobert]

Probably dependent on specific state laws for state you are in.

But in Oregon, a person named as trustee in a trust document is not "forced" to take the job. Such person can decline the job. I imagine that would be the case in any state. And such person declining the job is under no compulsion to find a replacement trustee--at least under no "legal" compulsion.

I suspect your own conscience and family tie would be the driving factor in your decision whether to reject the trustee job or not.

As to who would take over the role in your state, I imagine it would be some arm of state government. Perhaps the trust document itself explains. Or look into your state's statutes as to "trusts" and "trustees" to find the answer to that question.

 

[armor99]

Sadly.... I may one day find myself in a similar position. So do you have power of attourney over your brother? I guess what I am driving at, is asking if he is capable of taking care of himself, or he just chooses not to.
I am so sorry you are dealing with this. It is maddening watching people you care about harm themselves, and not be able to stop it...

 

[SecondCor521]

Look up your state laws about renunciation or disclaimers. In my state I believe you can disclaim such a role. What happens after that is likely dependent upon the trust language and/or state law if the trust language doesn't specify.

 

[The Cosmic Avenger]

I'm following this because I'm also a trustee for a SNT, although one that has not yet been executed. I don't believe any state can require anyone to assume the job of trustee, but if you are already a trustee you probably have a duty to find an alternate trustee. As Texas Proud said, you can probably pay a bank or guardian to assume that role, if the trust has enough funds to pay the trustee for their time.

I would also look into whether you can hire an agent to handle the day-to-day business of the trust but you can remain the trustee, like hiring a property manager. That means you can be emotionally removed from the details of the decision-making process, but you can still also maintain some control.

 

[Ginny]

In San Diego, CA there is a special needs trust foundation that handles this type of situation. Check this out: sntf-sd.org.

You should get out as life is too short. Sorry and good luck!

 

[OldShooter]

My guess is that the end of your road may be a court hearing where a judge names a professional guardian or conservator as successor trustee. If the assets won't support that, then probably the judge will liquidate the trust and give the assets to the beneficiary. IANAL, however. This is very specialized stuff.

As others have said, though, a good trust document will deal with naming a successor trustee.

 

[Teacher Terry]

It would be really awful if the trust is dissolved and gives all the money to him. He will lose all his benefits which are difficult to get back and may overdose if has a drug problem. I hope there’s enough money in the trust for all the expenses to hire someone to administer it.

 

[Drake3287]

OP again. The Trust documents simply state either me or my sister are to be the Trustee. It's safe to say no one in the family including my sister would agree to take this over if I give it up.

And yes, because he's on various state and federal government assistance programs, he's not allowed to be given cash directly, only through a third mean's such as a controlled and limited Visa card and me personally buying him things directly.

I'm not ready to give this up yet but I know at some point he'll finally drop the straw that breaks the camels back on all this. Obviously if and when this happens I'll need to talk with the attorney who set this all up. When my parents set this Trust up many years ago they never knew it would come with so many government controlled strings not to mention my brothers mental health issues.

 

[The Cosmic Avenger]

OP again. The Trust documents simply state either me or my sister are to be the Trustee. It's safe to say no one in the family including my sister would agree to take this over if I give it up.

And yes, because he's on various state and federal government assistance programs, he's not allowed to be given cash directly, only through a third mean's such as a controlled and limited Visa card and me personally buying him things directly.

I'm not ready to give this up yet but I know at some point he'll finally drop the straw that breaks the camels back on all this. Obviously if and when this happens I'll need to talk with the attorney who set this all up. When my parents set this Trust up many years ago they never knew it would come with so many government controlled strings not to mention my brothers mental health issues.

Why wait? The trust will probably pay for you to get advice, and the lawyer that set it up should certainly be able to tell you for little to no additional money if that's the case. I would ask now, so you can start to plan while you're NOT at the end of your rope. This is the time to figure out your options, not when you're desperate and in a hurry.
I hope you figure out something that serves both you and your brother well, best of luck.