ElderLaw News

ElderLaw News is a weekly e-newsletter that brings you reports of legal developments and other trends of vital interest to seniors and their advocates. This newsletter is brought to you by The Estate Planning & Elder Law Firm, P.C., William S. Fralin, Esq., President.

Pooled Trusts

Elder law attorneys often assist persons with disabilities who receive public benefits, including Supplemental Security Income (SSI) or Medicaid, and then receive a modest inheritance, divorce settlement, or personal injury settlement or award.

These funds may make this disabled person ineligible for public benefits. The disabled person could purchase exempt resources, and then reapply for benefits; however, in many cases, there are no appropriate exempt resources for the disabled person to purchase. This person would then be ineligible for public benefits until these funds are spent down. The disabled person could give the funds away, however, the gifts would result in a period of ineligibility for SSI and Medicaid long-term care benefits. If under 65 years of age, the disabled person could transfer the funds to a d(4)(A) Special Needs Trust (SNT); however, it is frequently difficult to find an appropriate trustee for this type of trust, and the administrative expenses may be high for a trust funded with $100,000 or less. A fourth alternative is to transfer the funds to a d(4)(C) ("Pooled Trust") subaccount.

What is a Pooled Trust?

A Pooled Trust is a trust established and administered by a non-profit organization. A separate account is established for each beneficiary of the trust, but for the purposes of investment and management of funds, the trust pools these accounts. Each subaccount is established by the person with a disability, a parent, grandparent, guardian, or a court. The trust provides that, upon the death of the disabled beneficiary, to the extent any amount remaining in the beneficiary’s subaccount are not retained by the trust, the trust must pay to the state the amount remaining up to the amount equal to the total amount of Medicaid assistance provided to the beneficiary. The Pooled Trust should be irrevocable to avoid being treated as a resource.

What are the advantages of a Pooled Trust subaccount compared to a d(4)(A) SNT?

The person with a disability may create his or her own Pooled Trust subaccount. Because the Pooled Trust is managed by a non-profit organization, it is not necessary to find a trustee who is willing to manage the trust. And because the Pooled Trust funds are pooled for investment and management purposes, the administrative expenses of these trusts are frequently lower than those of a d(4)(A) SNT.

What are the disadvantages of a Pooled Trust compared to a d(4)(A) SNT?

The d(4)(A) SNT is a trust managed by a trustee for the sole benefit of the disabled beneficiary. A family member or friend of the disabled person may serve as the trustee, or a corporate or professional trustee might serve. The d(4)(A) SNT permits the trustee to customize the management and investment of the trust to meet the unique needs of the beneficiary.

Can you give me an example of the use of a Pooled Trust?

A client who needed nursing home care, and was receiving SSI and Medicaid. She received an inheritance from her mother of approximately $50,000. The client was assisted in establishing a Pooled Trust subaccount to hold the inherited funds. Because her resources were less than $2,000 and there was no resulting period of ineligibility, the client continued to qualify for Medicaid long-term care assistance. The funds in her Pooled Trust subaccount can be used for goods and services for which SSI and Medicaid do not pay, such as dental care.

Where do you find a Pooled Trust in Virginia?

Commonwealth Community Trust
P.O. Box 29408
Richmond, Virginia 23242-0408
Tel: 888-241-6039
Website: http://www.commonwealthcommunitytrust.org/

Personal Support Trusts
The ARC of Northern Virginia
100 N Washington Street # 234
Falls Church, VA 22046
Tel: 703-532-3214 Ex 214
Website: http://www.TheArcofNova.org

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The Estate Planning & Elder Law Firm, P.C.

The Estate Planning & Elder Law Firm, P.C. is an elder law firm. We represent older persons, disabled persons, their families, and their advocates. The practice of elder law includes estate planning, estate and trust administration, powers of attorney, advance medical directives, titling of assets and designations of beneficiaries, guardianships, conservatorships, and public entitlements such as Medicaid, Medicare, Social Security, and SSI, disability planning, income tax planning and preparation, care management, and fiduciary services. For more information about The Estate Planning & Elder Law Firm, P.C., please visit our website at http://www.chroniccareadvocacy.com.

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