What is a Community Pooled Trust?
A community pooled trust is a type of special needs trust (SNT) managed by a nonprofit organization that pools the assets of multiple beneficiaries, allowing individuals with disabilities to qualify for government benefits while also protecting funds for their supplemental needs.
Individuals trusts to provide financial security for their loved one with a disability. It is designed to supplement the beneficiary’s basic needs but not supplant the public benefits that are available to provide those basic needs. Supplemental Needs Trusts allow people with disabilities to enjoy a better quality of life.
The possibilities for the continuation or increased quality of life are substantial, particularly if funds are invested and handled responsibly for the sole benefit of the person with the disability. Pooled trusts create an avenue for people with disabilities to be able to receive inheritances, wrongful death settlements and personal injury awards etc. without jeopardizing their public benefits.
Why are Pooled Trusts necessary?
The income and resource levels for public benefits programs are very low. Public programs only provide for basic needs and many parents use their own money to pay for the extra personal items and services which enhance their adult child’s quality of life. Once a parent dies however, any money they leave to that child with a disability, even a small amount, will result in loss of public benefits, including residential services and Medicaid. Without Medicaid, services will be lost unless the person has the means to pay privately. Any inheritance would be used up quickly to privately pay for necessary services; this is generally not the intention of the parents who leave money for their children.
How do Pooled Trusts work?
In the case of a nonprofit Pooled Trust, a master trust is established. The master trust holds sub-accounts, meaning separate accounts are maintained for each individual beneficiary. All sub accounts are pooled for investment, and management purposes. Since pooled trusts are established for the benefit of people with disabilities, upon the death of the Beneficiary, the money remains in the trust to benefit other people with disabilities.
Do I meet the eligibility criteria?
Individuals who are disabled as defined in Social Security Law Section 1614(a) (3) [42USC 1382c (a) (3)] are eligible to establish a FCPS Pooled sub-Trust account. There are no funding restrictions with respect to an individual’s disability, ethnicity or religious beliefs. A disability determination from the Social Security Administration or Department of Human Services (Medicaid) office is required. In addition, The Future Care Trust serves community members who reside within Monroe County and our neighboring counties.
Is establishing a Community Pooled Trust in my best interest?
Only you can best answer this question. However, at Future Care we encourage anyone considering a Supplemental Needs Trust to gather as much information as possible on the subject matter in order to make an informed decision. We encourage people interested in our Future Care Trust to consult with an attorney or certified financial planner who specializes in Supplemental Needs Trust law prior to making a decision regarding joining the Future Care Community Pooled Trust. FCPS can explain how the Trust can help you. Only you, after consultation with an attorney who specializes in Supplemental NeedsTrusts, can decide if the Future Care Trust is the best option for you.
The Omnibus Budget Reconciliation Act of 1993 (OBRA 1993) is the Federal law that allows the establishment of a Pooled Trust. The federal statute permitting Pooled Trusts is 42 U.S.C. 1396 p (d) (4) (C). It reads: (C) A trust containing the assets of an individual who is disabled (as defined in section 1382c (a) (3) of this title) that meets the following conditions:
The trust is established and managed by a nonprofit organization.
A separate account is maintained for each beneficiary of the trust, but for purposes of investment and management of funds, the trust pools these accounts.
Accounts in the trust are established solely for the benefit of individuals who are disabled (as defined in section 1382c (a) (3) of this title) by the parent, grandparent, legal guardian, individual or by a court.
For first party trusts, upon the death of the beneficiary, the trust pays to the State from such remaining amounts in the account, an amount equal to the total amount of medical assistance paid on behalf of the beneficiary under the State plan.
New York State Pooled Trusts are allowed under New York State Estates, Powers and Trusts Law, section 366.