What the Heck is a Pooled Trust?

…And How May Seniors or People With Disabilities Benefit from One?

When making decisions on care and insurance coverage for disabled and/or elderly loved ones, it’s easy to get lost in the myriad of choices and complicated regulations. With Medi-Cal there are income caps and asset limits, so individuals often do not qualify because their income or assets exceed the eligibility limits. A problem that often arises is when a disabled person receives a large sum of money (for example, the settlement from the accident that disabled them); the settlement money will disqualify them from their government benefits. Often, a Special Needs Trust can be set up to address this issue, but these are only for people under age 65.

How can an individual with disabilities qualify for Medi-Cal and get the care they need if they are over 65? A good solution is to use a Pooled Trust.

If your loved one with disabilities is a child, you need to ensure that they will be cared for in the event of your death. Since even a small amount of cash assets can disqualify individuals with special needs from the care and assistance they need, it is important to not let these assets pass directly to them upon your passing. A Trust is the best way to ensure your loved one with special needs keeps their care and assistance while also benefiting from the legacy you leave behind.

A Pooled Trust is a type of fund, much like a bank, in which contributions to the fund are pooled together for administrative purposes but separated into accounts based on the individual’s contributions for the disabled person’s needs. This set-up was originally intended to help those with disabilities with excess assets where a Special Needs Trust seemed too expensive, slow, or complicated. Unlike a Special Needs Trust, a Pooled Trust account can be created for a person with disabilities of any age. This can even include the normal disabilities of old age.

The way this works is that a qualified non-profit organization sets up the Pooled Trust account and creates a spending plan for income and assets. The amount allocated to this account will depend on factors such as monthly income, assets, expenses, and medical and special service needs. The non-profit will assign a Trustee who is responsible for managing the assets on behalf of the individual with special needs. The benefit of such an arrangement is that the Trustee and the non-profit are both heavily involved in the special needs community and understand the care and compassion needed to look after your special needs loved one

Not all Pooled Trusts are managed the same. It all depends on the non-profit managing the trust. Fees charged, payment disbursement, and the services they offer all vary, so be sure you know what you are signing on to. Do your research in finding the right Pooled Trust non-profit to set up and manage your account.

If you need assistance selecting a Pooled Trust that is right for you or your family, we invite you to contact our Bay Area special needs and elder lawyers to schedule a complimentary consultation with the mention of this article.