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|Posted on October 11, 2012 at 12:25 AM|
Special needs trusts can be complicated. They can be expensive to create on your own and knowing how to administer them is very no easy task. Selecting a trustee is often the hardest thing to do because it takes significant knowledge and skill to handle the trust's investments and know when and how to distribute money for the beneficiary.
A pooled trust like the Berks Community Trust is an excellent alternative to a standalone special needs trust. A trust account can be set up for significantly less money than is needed for a standalone trust. Moreover, a pooled trust already has a trust agreement so there's no need to pay a lawyer to create one for you. Finally, pooled trusts have trustees experienced with the many tasks needed to make a special needs trust work properly.
Pooled trusts give you many options to customize the accounts for the needs of each beneficiary. And so while it may seem preferable to have more control over a trust and develop all the provisions of the trust yourself and control the trust yourself or select those who run the trust for you, that control comes at a pretty big cost. For families with assets of $500,000 or more to fund the trust, a standalone trust can make sense. But for families with significantly smaller amounts to invest, a pool trust is a much more cost-effective option. It you don't know how to operate a special needs trust, having control over it is actually a drawback, not a benefit. With that control comes significant responsibility. But the purpose of a special needs trust is to help someone, not control them. The lower costs and administrative support offered by a pooled trusts put help for the beneficiary at the forefront and isn't that really the point?
Categories: Pooled Trusts vs. Standalone Trusts