Advice and Planning

Special Needs Trusts

Student with a disability

Special Needs Trusts can be an effective way for you to provide a secure and comfortable lifestyle for your child with special needs. A Special Needs Trust allows parents to invest and save money on behalf of their child by creating a fund that can be used to meet his or her financial needs. At the same time, these trusts generally will not affect your child's eligibility for government-sourced disability benefits such as Social Security, Medicaid, rehabilitative care and transportation assistance.

An attorney trained in special needs can help you set up a Special Needs Trust. If you decide that a Special Needs Trust is right for you and your child, you'll need to name a trustee. While family members often consider assuming this role, after reviewing the following list of responsibilities, you may want to consider other options.

The trustee's role

The responsibilities of a Special Needs Trust trustee are extensive and complex, and may include:

  • Understanding the beneficiary's situation and needs
  • Receiving and conducting an inventory of trust assets
  • Collecting income and prudently managing investment assets
  • Maintaining records for all income and principal transactions as well as preparing periodic accountings
  • Preparing and filing federal and state fiduciary income tax returns annually
  • Obtaining IRS tax registration for the trust
  • Establishing accounts for management of trust assets
  • Becoming familiar with the language and intent of the trust document
  • Arranging for the safekeeping and security of assets
  • Monitoring all disbursements to help ensure maintenance of any benefit entitlements
  • Hiring and regularly monitoring agents and service providers
  • Maintaining communication with the beneficiary and all service providers
  • Assisting in emergency situations to preserve the lifestyle of the beneficiary as the trust may allow.

When it comes to special needs services, Merrill Lynch offers a wide range of options designed to help simplify the process, while freeing the client to concentrate on the things that matter most. These options include:

  1. Merrill Lynch's Trust Administrative Advantage (TAA) provides a variety of administrative services to trustees managing trust assets through Cash Management Account for Trusts (a CMA that holds trust assets).
  2. Merrill Lynch's Managed Agency Services are designed to help individual trustees fulfill their fiduciary duties by delegating investment management and certain aspects of trust administration to Merrill Lynch Trust Company¹.
  3. Merrill Lynch maintains a referral list of professionals who provide trust administration and related services to simplify the process of locating a qualified, experienced trustee in your state. Included are Special Needs Trust attorneys as well as nonprofit organizations that serve the special needs community. Professional trustees serving the special needs community have the expertise and experience to efficiently handle the extensive and complex responsibilities associated with Special Needs Trusts, leaving family members time to focus on other concerns.



Discuss the three options with your Merrill Lynch Financial Advisor who can give you more details before making your final decision.

¹Merrill Lynch Trust Company is a division of Bank of America, N.A.

Note: Merrill Lynch does not provide tax, accounting or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state or local tax penalties. Please consult your advisor as to any tax, accounting or legal statements made herein, including with respect to special needs trusts and trustees.


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To contact a Merrill Lynch advisor with experience with Special Needs, please call 1.877.456.7526.
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