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Establishing Pooled Trusts

Published April 8, 2010

A pooled trust helps families and caregivers establish trust accounts that provide supplemental funds for their loved ones with disabilities without jeopardizing their eligibility for Social Security Income and Medicaid. An individual or his parents/guardians establish a sub-account with the pooled trust program. The program then pools all of the funds and invests them in one account, but each person in the pool has his own sub-account.

There are three major types of pooled trusts:

Third party: This type of trust is established with the assets of parents or others who wish to give to a loved one with disabilities. Importantly, state Medicaid does not have to be reimbursed. Upon the death of the beneficiary, 50% of the remaining trust assets may go to pre-designated beneficiaries, and 50% must remain with the trust for the benefit of other persons with disabilities.

Self-settled: In this type of trust, the money comes directly from the beneficiary. After the beneficiary passes away, there is no payback to Medicaid. Instead, any remaining assets are kept by the trust for the benefit of other persons with disabilities.

Income only: This type of pooled trust allows the Medicaid applicant who earns more than the allowable income to put the excess income in a pooled supplemental needs trust so that he may qualify for Medicaid.

If you are considering a pooled trust account as a planning option, a special needs trust attorney can provide guidance regarding which type of trust is best for you and your loved one.

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