Joe is 80 years old and requires health care assistance to such an extent he can no longer remain at home and bring in aides to help him. Joe decides he needs to transition to a nursing home but he will not be able to afford to pay out of his own pocket for the nursing home in about six months. Joe will need to apply for long-term care Medicaid benefits to pay for his nursing home expenses thereafter. At the same time, Joe wants to retain some of his money to pay for items and activities that the Medicaid benefits will not cover. What can Joe do to ensure he is eligible for Medicaid benefits yet has some funds available to pay for clothing, furniture, a mobile phone, non-prescription medication, and other things? Joe can transfer a portion of his assets to a so-called special needs “pooled trust” immediately prior to applying for Medicaid benefits.
A pooled trust is an excellent financial tool designed to help individuals with disabilities protect their assets while still qualifying for government benefits like Medicaid and Supplemental Security Income (SSI), including but not limited to older adults residing in a nursing home. These trusts are managed by non-profit organizations that pool resources from multiple beneficiaries while maintaining separate accounts for each participant. The pooled structure allows for more efficient management of funds, and is simpler and more cost-effective than establishing a traditional special needs trust. Since the trust is managed by a nonprofit organization, administrative costs are typically lower, and beneficiaries can take advantage of the expertise of professionals who ensure compliance with state and federal regulations so their public benefits are not endangered.
The non-profit organization administering the pooled trust typically charges a small percentage fee and completes annual income tax returns in connection with the funds it manages, among other tasks. When a beneficiary dies, if there are any funds remaining in the beneficiary’s individual account, Medicaid must first be reimbursed from those funds for any expenses paid on the beneficiary’s behalf during the beneficiary’s lifetime (this is known as a Medicaid payback clause). Thereafter, any funds remaining may be distributed to recipients named by the beneficiary before he or she died and/or to the non-profit organization to support other individuals with disabilities. In Massachusetts, there are three (3) well-known non-profit organizations that administer pooled trusts: Planned Lifetime Assistance Network (PLAN) of Massachusetts and Rhode Island, Inc., The Arc of Bristol County Pooled Trust, and Guardian Community Trust. Beginning in March, I will leave my position at Samuel, Sayward & Baler to serve as in-house counsel for PLAN of Massachusetts & Rhode Island.
Due to Joe’s advance planning, he successfully preserved a portion of his assets in a pooled trust to ensure he had sufficient funds for his personal needs while receiving government benefits to pay for his long-term care in a nursing home. If you have questions about long-term care planning for yourself or a family member, one of our knowledgeable attorneys at Samuel, Sayward & Baler LLC will guide you through your long-term care planning options, including whether a special needs pooled trust may be the right fit for you now or in the future.
Attorney Abigail V. Poole is a senior associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of trust and estate planning, estate settlement and elder law matters. She is an active member and Past President of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA), and beginning in March 2025 will serve as in-house counsel for the PLAN of Massachusetts and Rhode Island, Inc. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781/461-1020.
February, 2025
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