1. Investment and Case Management Issues
Robert B. Fleming
Fleming & Curti, PLC
October 20, 2005
Robert B. Fleming is a partner in the Tucson law firm of Fleming & Curti, P.L.C., with a practice limited to guardianship, conservatorship, estate planning, and probate. Mr. Fleming is one of the authors of The Elder Law Answer Book, published by Panel Publishers, and is a fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He is a member of the Special Needs Alliance ( the Pima County Bar Association, and the State Bar of Arizona. Mr. Fleming is well-known (in admittedly small circles) as a gadget guru and gadfly.
Fleming & Curti, P.L.C.

2. The Perfect SNT Trustee Is…
a doctor
a lawyer
a public benefits expert
an investment wizard
a social worker
immortal
Fleming & Curti, P.L.C.

3. Special SNT Challenges
Likely diminished capacity, social service needs of beneficiary
Status of state as beneficiary / creditor / supercreditor
Primary beneficiary may have outlying income needs (high or low)
Possible involvement of court
Fleming & Curti, P.L.C.

4. Investment of Trust Assets
Basic trust rules apply:
Prudent person rule
Prudent investor rule
Modern Portfolio Theory
Asset allocation and risk
“All that can be required of a trustee to invest, is, that he shall conduct himself faithfully and exercise a sound discretion. He is to observe how men of prudence, discretion, and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital to be invested.” Harvard College v. Amory , 26 Mass. (9 Pick.) 446, (1830)
From the “how things change” department: The Makers of Harvard’s Millions, The Harvard Crimson Online, June 7, 2001, at reports on the striking success of the investment of Harvard’s endowment fund.
Fleming & Curti, P.L.C.

5. Investment Principles
Diversification
Duty to manage investment costs
Prohibition against self-dealing
Using investment advisers
Investment Policy Statement
Fleming & Curti, P.L.C.

6. What’s Different for SNTs?
Primary beneficiary may be unable to effectively monitor trustee’s actions
State’s status may be uncertain:
Accountings and notice to state?
State’s power to intervene/object
Duty of impartiality
Preservation of principal may not be paramount
Fleming & Curti, P.L.C.

7. Practical Considerations and Options
Mutual funds
Load vs. no-load vs. “low load”
12b-1 fees
ETFs (Exchange Traded Funds)
iShares, VIPERs, SPDRs
Fleming & Curti, P.L.C.

8. Semi-Rhetorical Questions
Does active management add value? (see Malkiel, “A Random Walk Down Wall Street” (1973, revised 2003)
Should diversification include real estate? Collectibles? Metals? Etc.?
What is proper compensation to trustee for taking on risk of investment management?
Fleming & Curti, P.L.C.

9. Case Management
Restatement of Trusts (Second): Duty of loyalty (§170), to exercise reasonable care and skill (§174)
Having—or representing—special skills or expertise raises the bar
Case management may be an essential element of improving a beneficiary’s life
Fleming & Curti, P.L.C.

10. Common Dilemmas Caretakers—selection, oversight, covering emergencies
Securing services and equipment
Redirecting family and caretakers—and beneficiaries
Review of and adherence to Life Care Plans
Fleming & Curti, P.L.C.

11. Securing Case Management Services
Contracting for case management
Hiring professional case managers
Acting as a case manager yourself
Charging for case management services
Fleming & Curti, P.L.C.

12. Resources This outline: www.elder-law.com/Files/Stetson.pdf
Jackins, et al, “Special Needs Trust Administration Manual: A Guide for Trustees” ( (note: very Massachusetts specific)
Fleming & Curti, PLC, “Handling a Special Needs Trust—a Handbook for Trustees” (
Fleming & Curti, P.L.C.