A big decision you have to make when planning for your child’s future is who to nominate as their Trustee when you are no longer around. A Trustee has financial responsibilities to distribute the funds in a trust for the benefit of your child with additional needs. They can make financial decisions about your child’s needs, yearly budget, key purchases, paid supports, financial investments and other financial decisions that affect your child’s quality of life.
Each child has different financial capabilities and it will be up to each Trustee to gauge how much they include your child in each decision and how capable your child is at managing their own finances. Again this is where the role of the Trustee’s come into play to look out for the child and to ensure they are not being taken advantage of from a financial perspective.
Generally, Trustees are concerned with how best to pay the money out of the Trust and not impact entitlements or trigger tax liabilities. They also have to deal with how to invest the money while also minimise unnecessary risk to the capital. Trustees will meet with your child and their chosen Guardians to prioritise where the money is to be used.
Making Financial Decisions
A trustee’s most important role is in making a good financial decision that a person would exercise in the management of their own financial affairs, applying any inside knowledge they may have and to seek professional advice when needed.
We encourage all trustees to hire professional help in areas that they are not qualified in. This can be financial advisers, legal advisors and/or tax advisors. The trust fund can pay for these professionals and it will allow your Trustees to operate the trust under the reassurance that all reporting and tax returns requirements are being met. These professionals can identify all the assets of the trust and check that they are transferred to it and carry out any reporting that need to be completed. The trustee has a further duty to safeguard trust assets and, where appropriate, should ensure that they are properly insured.
The trustees should keep accurate financial records and accounts. These must be made available to the child or their Guardians on request. Trustees may also have to make financial decisions such as deciding how much per year to budget for expenses. Whether or not to invest some of the funds into more long-term investments or to diversify the funds held in trust.
When making any decisions, trustees should always ensure that they properly documented their rationale for those decisions and the factors that they considered in reaching those decisions. This is particularly important when making big life-altering decisions. A meeting should always be held to properly consider the big matters and an agenda and minutes of the meeting should be kept to document what the final outcome was. Trustees should consider whether it is necessary to obtain professional advice or if they have the skill to make this decision on their own. In certain circumstance, trustees can seek court approval when faced with very complex decisions.
Who Springs To Your Mind?
When reading this article who do you know that would fit the brief. Who do you know who is smart with money or as we say in Cork “cute with money boy!” As you have just read, they do not have to have a professional qualification but just the financial whereabouts to gather information and make good financial decisions for your child to maintain their quality of life when you are no longer there to make these decisions.