Excerpt from: The Legal Examiner (click for full article)
A professional trustee should always be utilized. Family members often want to serve as trustee. The trustee must be familiar with SSI law, Medicaid law, tax law, have investment expertise, and be familiar with fiduciary standards. The trustee must also be able to say "no" to requests for inappropriate trust distributions. Many states require corporate trustees in all but the smallest of Special Needs Trusts. Most states require an individual trustee to be bonded, which is often difficult, if not impossible. Where an individual serves as a trustee, it is inevitably a question of when, not if, the trust will blow up in everyone's face. Family members can be appointed as Trust Protectors and given the right to remove and replace the corporate trustee with another trustee. This gives the family members comfort.
Essentially, the trustee makes distributions to third parties who provide goods and services, rather than to the trust beneficiary. A distribution to the trust beneficiary would reduce the SSI payment dollar-for-dollar. Payment to third party providers for goods and services are not considered income, unless they provide food or shelter, in which event the SSI payment is reduced by approximately one-third, but Medicaid continues.