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

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 funds remain in the beneficiary's subaccount, 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.

When is a Pooled Trust used?

Elder law attorneys often assist persons with disabilities who receive public benefits, including Supplemental Security Income (SSI) and 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 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. Additionally, 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.

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: www.commonwealthcommunitytrust.org

Virginia Beach Community Trust c/o Mental Retardation/Developmental Disabilities
Pembroke Six,
Suite 218 Virginia Beach, Virginia 23462
Tel: 757-473-5223

Norfolk Community Trust
248 West Bute Street Norfolk, Virginia 23510-1404
Tel: 757-441-5300

ARC of Northern Virginia
98 North Washington Street Falls Church, Virginia 22040
Tel: 703-532-3214
Website: www.thearcofnova.org

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Maryland (301) 214-2229
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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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