Eligibility for needs-based programs like Medicaid and Supplemental Security Income (SSI) depend upon meeting certain financial requirements, such as the recipient with disabilities or special needs having no more than $2,000 in assets at any time.
However, if a person with special needs stands to inherit assets, say after a parent dies, it could cause him or her to lose benefits and healthcare coverage. Fortunately, there are tools called Special Needs Trusts that will safely hold assets for a person with special needs without jeopardizing access to public benefits. In the case of certain individuals, a Tampa special needs lawyer may advise that a pooled trust is the least expensive option.
A pooled trust is a specific type of special needs trust designed to help those who don’t have the means to set up a standard individual special needs trust. An individual special needs trust is set up by the individual or by a third-party for a specific individual beneficiary. A pooled trust, however, is set up by a non-profit organization and allows multiple beneficiaries to create accounts in that trust. Because these beneficiaries are pooling their assets, it is referred to as a pooled trust.
Using these combined assets, the organization managing the trust is able to provide services that would have been cost-prohibitive through an individual trust. They can also make more stable investments using the contributions to the pooled trust. And just like an individual trust, the pooled trust can be used to keep a person with special needs from losing their SSI or Medicaid benefits.
Another similarity between an individual trust and a pooled trust is that the funds can be distributed to cover a beneficiary’s expenses. Even though investments are made using the combined contributions, each beneficiary still has their own account.
One major difference between a pooled trust and an individual trust is the distribution of the assets upon a beneficiary’s death. In an individual trust, the funds often go to the government to reimburse the cost of medical expenses covered during the individual’s life. In a pooled trust, some of the funds are used to reimburse the government but the non-profit organization managing the pooled trust is allowed to keep a percentage. Those funds are then used by the organization to continue its mission.
For some people with special needs, the appeal of a pooled trust lies in the lower cost. For others, it’s the idea that their contributions will help other people with special needs. If a pooled trust sounds like something that might be useful for you or a loved one, schedule an appointment with our Tampa special needs lawyers and we’ll help you determine if a pooled trust is your best option.