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If you have special needs or you’re a parent of a child with special needs, you know that every fee, cost and tax is less money that can go to necessary care, living expenses and equipment. A settlement recovered in litigation may at first be a welcome relief, but the choices you make about that money directly dictate how long it will last.

Do you know how much you are being charged every year in costs and taxes for your special needs trust?

It’s important to work closely with a professional who has your family’s best interest in mind. Many people assume that going to their local bank or a big national institution is the safest. However, that route typically comes at the highest cost. Here is an example of how those trusts are most often administered:

  • Trustee = 1%
  • Investment adviser 1%
  • Expense ratios in funds = 1%.

When we’re talking about a million dollars in assets, those costs equate to $30,000 each year. And a million dollars isn’t an uncommon amount. For example, the average balance for a special needs trust for a child with cerebral palsy due to birth trauma is $1.7 million. However, a properly designed special needs trust should cost no more than 1.25 percent per year, which is almost a third as much as the norm.

When considering a special needs trust, collecting the right information is critical. Being well-informed from the beginning helps avoid falling victim to paying a staggering amount of money for trust costs. It all starts with finding a trustworthy team to explain the ins and outs. That’s what we do. Please feel free to call for a free consultation on how to set up a special needs trust or to evaluate whether you or your child may need one.

 

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