Trustee & Investment Fees
1st Party Trustee Fees
The Special Needs Trust Foundation charges nominal fees for administering your 1st party special needs trust (SNT). The minimum amount to fund a trust is $5,000.
For a 1st party trust, there is a one-time joinder enrollment fee of $1,000 that is collected from the trust once it is funded.
An attorney must be retained to assist with the Joinder Agreement and submission process. The attorney’s fees accrued may be paid by the trust once funded.
Accounts with a balance greater than $10,000 but less than $120,000 will be charged $100 per month, billed quarterly.
Accounts with a balance greater than $120,000 will be charged 1% annually, billed quarterly.
3rd Party Trustee Fees
The Special Needs Trust Foundation charges a minimal fee for administering your 3rd party special needs trust. The minimum requirement to fund a trust is $5,000.
For a 3rd party trust, there is a one-time joinder enrollment fee of $100 to be paid at the time the trust is approved.
The fees for the 3rd party trust are:
No fee for the first three transactions per month.
Four or more transactions per month are billed at $25 each, billed quarterly
Investment Fees
Trust accounts over $10,000 are invested approximately six months after funding. Morgan Stanley is the custodian for the trust accounts. Since SNTF is a pooled trust, the collective value allows for greater return on your investment and lower management fees. Morgan Stanley’s fee for managing investments is .67% annually and subject to change.
** In 2020 and again in 2021, Morgan Stanley lowered their management fee for SNTF trust accounts.
SNTs and Taxes
The accountant for the SNTF evaluates each 1st party’s investment earnings to determine if taxes may be owed. If a trust tax return is required, a Grantor’s Statement will be issued. It is the beneficiary’s responsibility to take this information to a certified tax preparer to file a personal tax return. Any taxes owed may be paid by the trust, along with tax preparation fees.
The accountant for the SNTF evaluates each 3rd party trust. If required the CPA will file a trust tax return. Any taxes owed and the CPA’s fees will be paid from the trust.
What happens to the remaining trust funds upon the death of the beneficiary?
A special needs trust is sole beneficiary trust. The trust terminates upon the death of the beneficiary. What happens to any funds remaining in the account?
A 1st party SNT may require Medi-Cal to be repaid upon the death of the beneficiary. If there is a balance remaining in the trust after Medi-Cal has been reimbursed, the funds will be distributed to the remainder beneficiaries. Medi-Cal claim is determined on a case-by-case basis.
A 3rd party SNT does not require a Medi-Cal payback. The balance in the trust will be distributed per the instructions in the Joinder Agreement. Upon death of the beneficiary, the remaining balance in the SNT will be distributed to the remainder beneficiaries, established by the donor. The JA requires a minimum of 25% is left to the SNTF and 25% to one of the member agencies. The remaining 50% may be left to the persons or organizations of the donor’s choice.
