Pooled Special Needs Trust

Brien Roche

Pooled Special Needs Trust have been around for quite some time.  They are to be distinguished from Individual Special Needs Trusts. The latter are overseen by an individual or corporate Trustee.

Pooled Special Needs Trust Preserve Public Aid

The overall idea of the Special Needs Trust is to create a fund of money for the disabled beneficiary. This may be a child or disabled person. The goal is to preserve the beneficiary’s right to public aid. In addition they are able to benefit from the Trust.
SSI and SSDI are not the same. In other words SSI pays benefits based on need. SSDI and SS Retirement pay benefits if you are insured. To be insured means you have worked long enough and paid Social security taxes.

Statewide there are a number of different Pooled Special Needs Trusts that exist.  The Pooled Special Needs Trust typically places the money to be invested with a money manager.  The Trustee then is a representative of the Trust who makes the decision as to any payments.  Also the trust may have social workers that work with the beneficiary and the family. In other words they try to ease any particular needs of the beneficiary.

Maintaining Public Aid

In order to maintain Medicaid and SSI the beneficiary can have no more than $2,000 in cash assets.  Therefore the money that is paid into the Trust is owned by the Trustee. It is no longer owned by the beneficiary. As a result the public entity can continue paying for the basic needs of the beneficiary. The Trust money can, with certain limits, be used for other items. These may help improve the quality of life of the beneficiary. In other words they can pay for such things as glasses and furniture. In addition the funds can be used for education and to some extent recreation. Call, or contact us for a free consult.

The beneficiary who receives Medicaid and/or SSI benefits will have to pay back these benefits to the extent there are funds in the Trust upon the passing of the beneficiary.

If any of the client’s medical expenses have been paid by Medicare, then the Medicare “lien” needs to be dealt with.  In addition, consideration should be given to a Medicare set-aside if there is any potential for future care for accident-related injuries.  This may apply whether the person is currently on Medicare or soon to become Medicare-eligible.

In addition if it is likely that the client will need Medicaid services that are not covered by Medicare, then the Medicaid eligibility needs to be preserved.  Those Medicaid services may include such things as skilled nursing care, in-home care giving, Medicare premiums, deductibles and co-payments.

If the plaintiff is someone who is likely to re-enter the workforce shortly, then the whole idea of preserving eligibility for public benefits may not have to be considered.

No Minimum

One advantage of such a trust is that there is no minimum amount necessary to establish the Trust.  The Trust for each beneficiary within the pool is maintained for each individual. However the funds of each are pooled with the funds of the other beneficiaries. As a result they receive the benefit of a larger pool of funds.

Each beneficiary may appoint a person to interact with the Trustee to make requests for payments.  This person may be a family member.  This person is entitled to an accounting from the Trustee. This should explain the amount of funds being held and what payments are being made.  Such Pooled Special Needs Trusts are a huge benefit for an injured person.

A further benefit of a pooled special needs trust is that there is no age limit.  Therefore someone who is 65 or older is eligible.

Finally then the criteria to be looked at in terms of a pooled special needs trust are:

• The size of the recovery.  Generally larger recoveries may be more appropriate for a private special needs trust;
• The client can be 65 or older;
• The client lacks someone in their life who is trustworthy to be their trustee.  With a pooled special needs trust, the trustee comes with the trust;
• Some state Medicaid agencies penalize funding in pooled special needs trusts by withholding Medicaid benefits for up to 5 years.  You need to be aware of what the state regulations are.

Other Options

Other options are such things as ABLE accounts and spend-down plans.

ABLE (achieving a better life experience) accounts are exempt up to $100,000 for SSI eligibility.  To be eligible, a person must have been disabled before turning 26, can have only one account and can only fund the account with up to $15,000 annually from all sources.  An ABLE account therefore makes sense for someone with a disability who meets the rules for use and receives in that settlement less than $15,000.

Another alternative is what is called a spend-down plan.  This makes sense where the amount recovered is fairly small.  For instance if the amount recovered is $50,000, the plaintiff could spend $25,000.00 on the purchase of a new car, assuming this is the only car, payoff credit card debt of $10,000 and then fund an ABLE account with the remaining $15,000, but all of that has to be done prior to the end of the month when the money is received.  This will preserve SSI and Medicaid eligibility.

Other alternatives are such things as prepaying for shelter, goods or services.

Arc of Northern Va.

In Northern Virginia the Arc of Northern Virginia operates a pooled special needs trust. This group is staffed by wonderful people. These people do great things for their beneficiaries.

Call, or contact us for a free consult. Also for more information about special need trust see the pages on Wikipedia and the pages on this site about personal injury.