Regardless of the form of trust one uses, critical non-tax issues come to the forefront when crafting an estate plan for married and single parents, grandparents and parents with special needs children. 

What assets will flow into the trust?  Who will manage the funds in the trust?  Who will decide when and for what purposes funds will be distributed from the trust?  What guidance will the trustee be given regarding distributions and how will that guidance be provided?  All of these issues need to be carefully considered when structuring the trust. 

The choice of trustee is one of the most important decisions a parent or grandparent will make.  There are many criteria to apply when selecting a trustee.  At the top of the list is selecting someone in whom the client has complete confidence since most trusts are not supervised by the courts.  While the trustee has a fiduciary duty to account for his actions and follow the trust's terms, there is obvious opportunity for abuse.  In many cases, naming co-trustees is a good option as they both share the burden and provide checks and balances.

In cases where a non-professional trustee is used, the person should understand the complexity of his responsibilities.  In addition, a non-professional should be someone who is able to devote the proper time to the trust administration.      
If a special needs child will be a beneficiary of the trust, it is very important that the trustee be familiar with the child and his or her needs.  A family member or friend can often fill this important role.  The trust can also be structured to include a trust advisory committee made up of individuals familiar with the child's special needs to help guide the trustees. 

Many clients use professional trustees, such as a bank or trust company.  A good professional trustee will ensure that the business end of the trust is run properly (e.g., the funds will be secured and invested properly and tax returns will be filed).  In addition, many corporate trustees have in-house resources to help the trustees address the special needs of the beneficiary.  In the right situation, the use of a professional fiduciary can be a benefit.  The downsides to using a professional trustee include the fees that will be charged and the concern that, in some cases, professional trustees are not adequately tuned into the needs of the beneficiary.  If a professional trustee is used, it is a good idea to give someone the power to remove and replace the professional.  The trust can be drafted to require a professional trustee, and define what is meant by this term, and then give someone power to select, and replace, the professional as appropriate.  

The choice of an appropriate trustee takes on an added dimension with single parents.  If the parents are divorced, typically the client with custody of the children will not want the other parent to play any role in the trust.  Most trusts have trustee succession provisions specifying that if there is no trustee serving, the beneficiaries can select a successor.  If the beneficiaries are minors, then their guardian could have a voice in the selection.  Thought should be given to excluding the ex-spouse both from ever serving as trustee and also from participating in the selection of a successor trustee. 

The term "special needs trust" usually refers to a trust that's prohibited from making distributions that would impact the beneficiary's eligibility for needs-based government benefits.  Such a trust seeks to supplement the governmental benefits but not affect the beneficiary's eligibility for those benefits. In most cases, a traditional special needs trust is not the right fit for a family with significant wealth. In these cases, trustees often conclude that they can provide better care for the child by making distributions regardless of the child's eligibility for needs-based benefits.

Clients-no matter what their level of wealth-typically use a trust to make sure their special needs children will continue to have their food, clothing, shelter, medical expenses and educational expenses paid for.  Some clients will have other reasons for which they would, or would not, want funds distributed. Guiding the use of funds, however, is a balancing act. Placing too much specific direction in the trust can have the unintended effect of tying the trustee's hands when unforeseen events arise. Having no direction at all regarding when distributions should be made can place the trustee in an equally difficult position.  A trust drafted with broad discretionary powers over distributions, accompanied by an external letter of wishes or instructions from the person creating the trust, is one way to strike an appropriate balance. 

When minor children are involved, thought should be given to where the child would live if something happens to one or both of the parents. If title to the family home would flow to the trust, direction should be given regarding whom the trustees could allow to live in the home and what expenses for the home would be paid from the trust.   If the child lives with a guardian, would the guardian need to buy a larger home or place an addition on his home?  If so, it may be appropriate for the trust to provide for a limited distribution to the guardian to cover such expenses. 

Once the trust has been set up, careful attention needs to be given to ensure that it is properly funded.  This involves review of both how much needs to be in trust for the child and what kinds of assets are best suited to meet those needs.  Many parents with special needs children purchase life insurance, owned by an irrevocable insurance trust, to provide funds to care for the child.  With a married couple, second-to-die life insurance owned through an irrevocable trust can be a cost-effective way to provide funds for the child's care.