Pooled Special Needs Trusts
Article submitted by Margy Campbell, LCSW, CMC, CFP, Master Guardian of Age Connections and Guardian & Conservator Services, LLC. She can be reached at 801-281-1100.
The term “special needs trust” originated in California, but these supplemental trusts were also used in other parts of the country. The development of these carefully crafted trusts arose from the dilemma faced by parents of disabled children. An outright “gift” of assets (cash/property) to a disabled individual over $2,000 would exceed the resource limit allowed by SSI or state Medicaid. By receiving the bequest the individual in need of state or federal benefits would loose them.
In 1993 Congress created “safe harbor” trusts in the United States Code. These trusts allow an individual to transfer their own assets to a trust without affecting eligibility for government benefits such as Medicaid, if certain requirements are met.
The (d)(4)(C) SNT is a pooled trust where funds are managed buy a nonprofit corporation. A separate account is maintained for each beneficiary of the trust. These SNT's must be established and managed by a nonprofit association. To the extent any amounts remain in the beneficiary's account upon the death of the beneficiary, the pooled trust pays a portion, as set out in the master trust, of these funds to the state up to the total amount of medical assistance paid on behalf of the beneficiary under applicable state Medicaid plan, and the nonprofit corporation may keep the balance.
Funds held in a pooled SNT pay be used to enhance the quality of life for the beneficiary by paying for goods/services not paid for by state Medicaid programs. A pooled SNT cannot pay for housing, utilities - including heat and electricity, and food.
A Special Needs Trust is a wonderful option, and simply put, a necessity if you want to ensure that your loved one with special needs is taken care of after you are no longer able to.