A special needs trust is established for the benefit of a disabled beneficiary, so that the beneficiary can enjoy the benefits of trust assets without losing eligibility for needs-based government benefits such as SSI and Medicaid. A pooled special needs trust is a special type of special needs trust, authorized by federal law, in which a non-profit organization pools together assets contributed by many beneficiaries and distributes benefits on a pro-rata basis.
The beneficiary can be of any age, but he must meet the legal definition of “disabled”, which means he cannot be able to work. Many non-profit organizations offer various types of pooled special needs trusts with different fees, services and qualification standards.
To operate in accordance with federal law ( 42 U.S.C. §1396p(d)(4)(C), to be exact) so that eligibility for means-tested government benefits can be preserved, the following qualifications must be met:
It is possible, of course, to establish individual trusts — there is no absolute requirement that you rely on a non-profit organization to pool the assets of various beneficiaries. The pooled trust option is right for some people but wrong for others. Following are some of the pros and cons of pooled trusts:
Following are some of the advantages of pooled trusts:
Following are some of the main disadvantages of pooled special needs trusts: