Pooled Special Needs Trusts

A Pooled Trust is a type of Special Needs Trust authorized under the Federal law. It differs from an individually crafted Special Needs Trust in several ways. First, a Pooled Trust has no age restriction. Special Needs Trusts under 42 U.S.C. 1396p (d)(4)(a) can only be created for those under age 65. However, Pooled Special Needs trusts under 42 U.S.C. 1396p (d)(4)(c) have no such age restriction. Additionally, a Pooled Special Needs trust is not an individually tailored trust. Instead, a disabled individual joins a Pooled Trust and a professional trustee pools the assets together for purposes of investment but each beneficiary of the trust has his or her own sub-account.

Second, a Pooled Trust is managed by a not for profit entity called a trustee who oversees distributions of the money and may or may not manage the money. In some instances the non-profit trustee may hire a separate money manager to oversee investment of the trust assets. Third, at death the non-profit trustee retains whatever assets are left in the trust instead of repaying Medicaid for services they have provided as is the case with a (d)(4)(a) Special Needs Trust. Some pooled trusts do payback Medicaid and will distribute any leftover funds to the trust beneficiary's estate less some percentage. Other than the aforementioned differences, it operates as any other Special Needs Trust does with the same restrictions on the use of the trust assets.

To learn more about how a Special Needs Trust can be utilized and its limitations review the SNT FAQ.

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