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I’ve heard about Special Needs Trusts but what is a Pooled Trust?

A pooled trust is created by the person with special needs, a parent, grandparent, guardian, or a court. However, the trust is administered by a non-profit organization. The trust is funded by the disabled beneficiary’s assets. Each beneficiary has a separate account established, but for the purposes of investment and management of funds, the trust “pools” all these various accounts into one.  However, upon the death of the disabled beneficiary, if there are funds remaining in the account, the trust pays to the State of Maryland, an amount up to the total amount of Medical Assistance provided to the beneficiary.  The pooled trust must be irrevocable to avoid being treated as a resource.

A person with disabilities who receives Supplemental Security Income (SSI) can retain assets of approximately $2,000. However, if they receive assets including but not limited to an inheritance, or personal injury award, these assets may make this person ineligible for SSI, Medicare or Medical Assistance etc. (public benefits). Obviously, if these assets are spent on exempt resources, then the beneficiary can reapply for public benefits.  However, informing the public benefits agencies of these assets, being denied and then reapplying is a major hassle. Usually, there are no appropriate exempt resources for the person with disabilities to purchase.  Therefore, a person with a disability would then be ineligible for public benefits until these funds are spent down.  The person could give the funds away. However, these gifts would result in a period of ineligibility for SSI and Medical Assistance benefits. Consequently, transfer the funds to the Pooled Trust.

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