Pooled Trusts and Medicaid Eligibility

To qualify for Medicaid, a senior’s income and assets must not exceed the allowable limits.  A pooled trust provides a way for disabled seniors to put their excessive resources in an account and thereby qualify for Medicaid and still have access to some of those resources for specific purposes.  Through such an arrangement, qualified seniors can receive care services in their homes paid for by Medicaid and avoid having to move into a nursing home.

How a Pooled Trust Works
Pooled trusts are managed by non-profit associations.  A disabled senior creates an account within the pooled trust and contributes their excessive income and assets.  Those resources are combined with other contributors’ resources and are invested and managed as a pool.  However, the senior can still access the money in the trust to pay rent, a mortgage and other bills.  When the individual in need of care passes away, the remaining resources stay in the pooled trust to help other beneficiaries or are paid to Medicaid.

Pooled Trusts are Sometimes Referred to as:

• Nonprofit Pooled Income Special Needs Trust
• Special Needs Trusts
• Supplemental Needs Trusts
• (d)(4)(C)
• Pooled Income Trusts

Cost to Set Up a Pooled Income Trust:
By creating a pooled income trust, individuals will likely experience two types of fees.  An attorney will bill the individual on an hourly basis to set up the trust.  It should not take an attorney more than a few hours to do so.  The pooled income trust itself is typically run by a non-profit organization and will usually have enrollment and annual maintenance fees.  However, these are not significant and since the primary objective is to lower one's income to a Medicaid-eligible level, these fees should not impact the individual.

Medicaid Eligibility Notes
Some states allow disabled seniors to transfer assets to a pooled trust and then apply for Medicaid immediately while other states may require seniors to wait several years before becoming eligible.  To learn more, find a qualified Medicaid planner in your state.

Pooled trusts are best suited for individuals who assets and income exceed the Medicaid thresholds by less than $20,000.  There are other types of trusts that might be appropriate such as a Miller or Income Cap Trust.  It is best to discuss these options with a qualified elder care financial professional prior to speaking with Medicaid.



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