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What is a pooled special needs trust?

The Golden State Pooled Trust is a pooled special needs trust. Special needs trusts, more broadly, are established to support individuals with disabilities by providing for supplemental needs that enhance quality of life. Special needs trusts should reflect the unique objectives, values, and needs of the beneficiary, and should focus on enabling the beneficiary to achieve as much independence as possible.

In addition to enhancing quality of life, special needs trusts are an important vehicle by which individuals with disabilities can stay eligible for needs-based government benefits such as SSI or Medicaid, while still being able to address ongoing supplemental needs. With a special needs trust, funds are set aside in such a manner that the beneficiary does not own them — the trust holds title to the property for the benefit of the individual. The trustee then has full discretion to make distributions that are aligned with the individual’s needs and values. Because the beneficiary cannot directly access the funds or convert them to cash, they are not considered a “resource” for the purposes of calculating government benefits eligibility.

A pooled special needs trust is a particular type of special needs trust whereby beneficiaries’ assets are pooled together for investment purposes. The Social Security Administration indicates that pooled special needs trusts must meet the following requirements:
While a pooled special needs trust is a great option for many, it is important to seek out good counseling before committing funds to one. The Golden State Pooled Trust is happy to consult with individuals, families, attorneys, and other service providers to discuss options and assess needs.
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Advantages of a pooled special needs trust

There are several notable advantages of a pooled special needs trust:

Case Studies

Below are several examples of individuals who benefit from a pooled special needs trust.

Helen

Helen is 58 years old, has inherited $60,000 from an unexpected inheritance from her aunt, and is receiving SSI and Medicaid. Loss of her Medicaid would cause her great hardship. She has no parent or grandparent alive, and to establish a self-settled special needs trust would require a court order. Setting up a court-ordered special needs trust would cost $5,000 to $7,000, take 3 months or longer, and would require costly court supervision. Helen could instead join a pooled special needs trust at a fraction of the cost, have professional administration of the account, and avoid court supervision.

John

John has multiple sclerosis, has a residence worth $400,000, and wants to sell the home and purchase a smaller residence for $100,000. John would like to use the balance to pay for his care. Both SSI and Medicaid allow a benefits recipient to own a residence of any value, but if John retains more than $2,000 in his own bank account, he will have a loss of benefits eligibility. If John does not have a parent or grandparent alive, he would be faced with a costly legal procedure to authorize the establishment of a self-settled special needs trust. John could put the balance of the funds in a pooled special needs trust and then use the account to pay for his care that is not covered by Medicaid. If the trust pays for his attendant care directly, there will be no loss of his benefits.

Jane

Jane is the recipient of a civil rights settlement totaling $50,000. Her wish is to use the funds to go to law school with the hope that some day she can get off public benefits. She placed her funds in the pooled special needs trust, and the trust is paying her tuition and buying her books. Her goal is to get a job with good medical benefits and not be reliant on public benefits for the rest of her life.

Sam

Sam is 67 years old and has become disabled because of a work related injury. He is receiving the maximum SSI, and Medicaid. Sam is going to receive a Workman's Compensation award of $64,000. John is receiving Medically Needy Medicaid and feels it is unlikely that he is going to need to be in a nursing home so long as he has dependable attendant care. A self-settled special needs trust is not an option because he is over the age of 65. The pooled special needs trust will pay for his attendant care directly.

Albert

Albert has cerebral palsy and receives SSI, Medicaid, and Section 8. He inherited $120,000 directly from his father. He wants to use the funds to purchase a residence, and through a program offered by Fannie Mae called HomeChoice he qualifies for a 3% loan, and can use his Section 8 Voucher towards payment of the mortgage. He estimates that it will take nine months to qualify for the program. Albert places his funds in a pooled special needs trust and uses $80,000 towards a down payment. The remaining funds are retained to pay for maintenance.