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Estate Planning- What is a Pooled Trust?


Whenever someone calls me and asks about a Pooled Trust, it becomes apparent pretty quickly that there is a lot of confusion and misinformation about how they work, who they are used for, and how to become involved in one.  My hope is that I can clarify some things and give you a broad overview which will answer some of these questions.

First, understand that a Pooled Trust is a very specific trust that allows individuals who are considered special needs and are receiving government benefits to retain some assets and income (potentially) while still keeping eligible for their public assistance. From a practical standpoint, one of if not THE most important consideration when I am presented with a special needs type situation is that I do everything possible to preserve those government benefits.

As the law currently stands, any assets held in an ordinary trust will be counted against recipients of public benefits when calculating the eligibility of the individual based on their income and asset limits. This is why for special needs persons we cannot simply do some standard estate planning. Because of these laws, recipients of public benefits will be disqualified and their benefits discontinued if the assets and income exceed some pre-defined standards.


Medicaid Use:

Under current Medicaid law in New York, any income that is received each month that exceeds the Medicaid monthly allowance has to be “spent down” on medical or home care services before Medicaid will provide coverage. Basically- Medicaid will not pay for your care until you pay as much as you can yourself. What happens then is that excess income each month that you would normally spend on living expenses such as food, rent, clothing, and utility services is not available. The end result is that Medicaid recipients will not have enough income to pay their normal monthly living expenses. One solution is for Medicaid recipients in New York to deposit their income in a Pooled Income Trust. Then they will not be subject to the rules that normally apply to excess income. In other words, Trust income will not be counted as available income to be spent down each month. This benefit of favorable income protection is available by joining a Pooled Trust.

Also, Pooled Trust beneficiaries receive a value that comes from pooling funds for management purposes. The Trustee can more effectively manage and administer the accounts set up for each of the beneficiaries in the Trust. There is a downside though, as there are usually some small enrollment fees and monthly fees.


Who is a Pooled Trust typically used for? 
• Younger persons with special needs (remember we can PRESERVE those benefits!)
• Elderly persons who have become infirm and are living at home
• Anyone who receives government benefits.

Once the funds are in the Pooled Trust account, by law you are allowed to use the funds on the following items:

• Living expenses, including clothing, food and shelter (Unless the recipient is receiving SSI)
• Housing costs(Utilities, Rent, Taxes, etc.)
• Supplemental nursing care
• Medical procedures not provided through government assistance
• Entertainment and travel expenses
• Attorney and Guardian fees


What are the Basic Requirements for Joining the Trust?

So in order to qualify there are some things that you need to know.

• The beneficiary must be disabled as defined by law.
• The assets going into the beneficiary’s trust account must belong to the individual beneficiary.
• The Trust account may only be established by a parent, a grandparent, a legal guardian, the individual beneficiary, or by a Court.
• Each Trust account must be established solely for the benefit of the individual beneficiary.


Should you wish to discuss the use of a Pooled Trust you can always reach out to get some more information!

Contact us today for a FREE CONSULTATION
  • click here - April 29, 2016 - 1:49 pm

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