Essay
Who Takes the Trust Nobody Gets Rich On?
Every trust department has a list of the accounts it loves. The question that tells you what a firm actually believes is the other list — the trusts nobody gets rich administering.
A recent look at Members Trust Company laid out the “three things it won’t touch,” and it echoes a pattern across the industry: trust companies quietly exiting special needs work, or pricing it so far out of reach that everyday families can’t get in the door.
Why this one matters more than most
A special needs trust is not a wealth-maximization vehicle. It is a firewall. A properly drafted trust under 42 U.S.C. §1396p(d)(4)(A) lets a person with disabilities hold resources for their comfort and quality of life without losing the needs-based benefits — SSI and Medicaid — that keep them housed and cared for. Inherit the money directly and those benefits can vanish overnight. Route it through the trust and the safety net holds.
But the statute only works if a human being actually administers it: makes the supplemental distributions, keeps them supplemental, files the accountings, and never writes the check that disqualifies the beneficiary. A (d)(4)(A) trust with no willing trustee is a legal document protecting nobody.
The margin argument, answered
The business case against these trusts is honest as far as it goes. The balances are small, the administration is detail-heavy, the liability is real, and the fee will never look good on a spreadsheet. Thin margins are a fair thing to name.
They are not a fair thing to hide behind. Fiduciary duty was never conditioned on the account being lucrative. The whole idea of a trustee — the reason the role carries legal weight instead of just a service agreement — is that someone answers for what belongs to a person who can’t fully answer for themselves. The newest soldier and the most vulnerable beneficiary get the most care, not the least. That principle doesn’t come with an asset minimum.
I walk through where the special needs trust fits in a family’s plan in the Wealth Guide, and what it takes to administer one correctly after a death in the Estate Guide. The mechanics are learnable. The willingness is the scarce part.
Somebody has to take the trust nobody gets rich on. That somebody is what the word fiduciary is supposed to mean.
Source: Members Trust Company: The Three Things It Won’t Touch (and Everything Else It Will) (The Wealth Advisor). Educational only — not legal advice.