Financial Tips

Changing Trustees of a Special Needs Trust

The relationship a trustee has with a beneficiary is one that is not only of a legal fiduciary nature, but one of a personal nature, as well. The personal aspect of this relationship could not be further exemplified than in terms of a special needs trust.

When administering a special needs trust, there is an important relationship not only between the trustee and the beneficiary, but many times, the beneficiary’s family, guardian, and other trusted advisors of the beneficiary (care managers, accountants, attorneys, etc.). There is no way around this relationship becoming deep over time due to the ongoing personal needs of the beneficiary, the family dynamic, and the vital need for emergency, personal discussions between beneficiary and trustee. In short, the trustee not only has a fiduciary responsibility to administer the trust for the sole benefit of the beneficiary, but frequently becomes a trusted member of the team on which the family relies to fully understand the needs of the beneficiary and to make the beneficiary’s life better.

This being established, trustees are appointed at the outset of a trust being created (or well ahead of time) and there is the intention and hope that the trustee will understand how important and deep the relationship will become. However, many times this is not the case and a beneficiary ends up in a less-than-ideal situation where their trustee is not as responsive as they should be, not as accessible as the beneficiary needs, and may not even be fulfilling their fiduciary obligations (such as failing to pay certain expenses, making imprudent investment decisions, or taking excessive fees).

Once in this situation, the unfortunate fact is that beneficiaries and their families frequently just assume, “this is just how things are,” and struggle on with a poor relationship with their trustee. The fact of the matter is that beneficiaries and their families are very infrequently familiar with the law and the terms of their own special needs trust.

The fortunate fact is that the law, as well as the vast majority of properly-drafted special needs trusts, allow for the replacement of a trustee. Many times the controlling trust document contains very specific language that allows for a beneficiary, their parent, or guardian (depending on the circumstances) to change trustees without any court involvement and within a very reasonable period of time. For example, we frequently see documents with language that states something to the following effect:

The parents or guardian of the beneficiary shall have the right to remove any Trustee, whether that Trustee is currently serving or named to serve in the future, provided the removed Trustee is provided thirty (30) days’ notice of its removal in writing along with the name of a replacement Trustee. If there is a vacancy in the role of Trustee, the parents or guardian of the beneficiary shall have the power to appoint a replacement.

As you can imagine, it is not the current trustee who will be voluntarily discussing this with beneficiaries and their families, so it is up to the other trusted members of the team to recognize when there is an unsatisfactory trustee relationship and voice these concerns to, for example, the drafting attorney or other professionals involved. Similarly, if an attorney is approached by a family member, guardian, beneficiary, or other professional involved, that attorney should remind the appropriate person that there are other options to consider with respect to who is named as trustee and the process for making a change. These are aspects of the law and the trust that need to be discussed at the outset with the beneficiary and/or their family and reviewed on an annual basis.

The bottom line is that those individuals for whom there is a special needs trust established have likely been dealt a challenging hand in life already and they should not be forced to maintain a similarly-difficult relationship with a trustee who does not truly understand their needs and the inherently delicate link between a trustee and beneficiary of a special needs trust.

Univest Bank and Trust Co. has gladly acted as successor trustee under similar circumstances for more than 90 years. Providing the personal attention and service that you or your beneficiaries need is a top priority. If you are interested in speaking with Univest Bank and Trust Co. regarding the benefits of utilizing our fiduciary services, please reach out to us at 215-721-2414.


Trust services are offered through Univest Bank and Trust Co. Products and services offered are not FDIC insured, are not a deposit of or bank guaranteed, and are subject to risks, including possible loss of any principal amount invested.