Special Needs Trusts The Very Basics: Part III:  Pooled Trusts

Pooled Trusts in the Special Needs Planning arena serve a critical need.  Pooled Trusts offer professional administrative services and the benefits of investments of combined, or pooled, assets.  In the Special Needs area, Pooled Trusts bring expertise in managing and protecting assets of the disabled person to best ensure that government benefits will not be compromised through trust administration.  

Assets which fund a Pooled Trust are combined with assets of other Pooled Trust participants, yet each beneficiary retains their own designated account for their asset contributions (the participant’s “Sub-Account”).  The Trustee manages the assets on behalf of the disabled person.  The Trust is non-profit.  The Trustee typically performs necessary administrative functions such as preparing tax documents such as the K-1 Tax form, as well as retaining necessary professionals such as attorneys and accountants.

The Pooled Trust Trustee further provides services directed for the care of the disabled person.  The Trustee may develop an individualized care plan for the beneficiary.  The Trustee will research the availability of government assistance programs for the beneficiary and then apply on the beneficiary’s behalf.  The Trustee shall ensure that distributions will not adversely impact these government benefits.  In sum, the Pooled Trust Trustee is a professional Trustee in managing the special needs of disabled persons.

To join a Pooled Trust, a medical payback requirement must be included in the Pooled Trust.  Assets remaining in a participant’s Sub-Account at death must first be used to pay back benefits received from government programs.  Pooled Trusts also include both set up and annual fees.  With these fees comes the professional and dedicated Trustee and knowledgeable staff in working with and representing disabled persons.  That expertise cannot readily be replicated.  

For assistance with these Special Needs Planning issues, including consideration of Pooled Trusts, contact Michael Geiger at Geiger Law.

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