Founder
Pooled trusts are those that contain the assets of numerous individuals and which are established and maintained by a non-profit organization. These are set up for disabled individuals so as not to jeopardize their receipt of public benefits or to render them ineligible. Funds transferred to a pooled trust are not considered disqualifying transfers for determining eligibility for MassHealth or SSI. Funds also may continue to be transferred after a MassHealth application has been filed and is under consideration.
Who Can Set up a Pooled Trust?
Pooled trusts can be set up by a disabled person, parents, grandparents, guardian or the court if it is a (d)(4)(C) pooled trust. Self-settled, special needs pooled trusts, or (d)(4)(A) pooled trusts may not be set up by the disabled individual.
Individuals in these trusts have their own sub-accounts with the funds being used exclusively for them. These are beneficial for disabled persons under the age of 65. They are also less costly to administer than special needs trusts because the funds are pooled for investment and management needs. Further, it is not necessary to find someone who is capable and willing to serve as trustee since the non-profit is designed to act responsibly and professionally.
What is a Disability
A disability for purposes of a pooled trust is the same as that required for SSI disability eligibility. You must have an impairment that has lasted at least one year and is serious or severe enough to prevent you from engaging in substantial and gainful employment.
How May the Pooled Trust be Used?
Funds from a pooled trust may only benefit the disabled person. They may be used to pay for the following:
- Medical insurance premiums
- Prepaid burial expenses
- Basic needs such as rent, food and clothing
- Personal needs allowance
- Education
- Entertainment if consistent with the individual’s needs
- Attorney, trustee, guardianship and conservatorship fees
- Certain tax liabilities
- Dental or other medical care not covered by Medicaid
- Supplemental nursing care
- Occupational and rehabilitative therapy services
You may not use funds for such expenditures as :
- Medical expenses covered by MassHealth
- Past debts
- Child support
- Income taxes
- Insurance premiums for other individuals
- Shelter or rent in a shared household
- Family vacation costs
Payback Requirements
Depending on the type of pooled trust established, the funds in a pooled trust account remaining after the trust beneficiary passes away may or may not be used to pay back Medicaid. For instance, you can set up a third party pooled trust that is created and funded by a family member and not by the disabled person, which is not a payback Medicaid trust.
In others, the non-profit would retain a portion of the remaining funds to be used for charitable purposes. Other remaining funds in an account, though, would be used to repay Medicaid. For this reason alone, it is vital that you consult with a lawyer that understands what a pooled trust is to discuss what type of pooled trust is best for you and how to avoid paybacks.
Patricia Bloom-McDonald is an elder lawyer who has been advising and representing seniors and their families in assisting them with establishing various types of trusts including pooled trusts. Contact her office for a complimentary first consultation on whether a trust is appropriate for your or your loved one’s needs and if a pooled trust is one that can benefit you or your disabled loved one.