Pooled Trust

What is a pooled trust?

Pooled trusts are special needs trusts administered by nonprofit organizations that combine assets for multiple individuals with disabilities into a single trust. This helps the nonprofit organization take advantage of lower administrative costs while also letting them invest the assets held in the trust in a way that generates stronger returns for the beneficiaries. 

These trusts pool resources but maintain individual accounts for each beneficiary. This ensures that distributions come from each individual’s asset fund. 

Pooled trusts let individuals and their families set money aside for their long-term care without putting them at risk of changing their Medicaid eligibility, losing government benefits or access to government programs, such as:

• Supplemental Security Income (SSI)
• Medicaid benefits
• Food assistance (such as SNAP)

There are minimal restrictions on how disabled individuals can use the money in the trust. This means they can use the funds to pay for routine costs like personal items, medical care, or purchases that improve their quality of life without exposing them to the risk of losing public benefits.

Pooled trust FAQs

How much does a pooled trust cost?

The amount that people will pay to enroll in a pooled trust varies from group to group. Some providers charge a low one-time enrollment fee. Others charge an enrollment fee and an ongoing maintenance fee that’s a percentage of the assets held in the individual’s account. You may want to compare providers and look at their fees before joining.

What are the disadvantages of a pooled trust?

When families join a pooled trust for their special needs family member, they lose control over the assets held in the trust. This can make it harder to make changes to the assets held or adjust the trust to reflect their loved one’s changing needs. The trust also controls the distribution of funds and sets the schedule for those distributions, which may leave some people short on money when they need it.

Individual special needs trusts could offer more flexibility and control, however, they tend to cost more and have higher administrative fees.

What happens to unused funds in a pooled trust when the beneficiary dies?

Typically, unused funds in a pooled trust account go toward repaying the state for Medicaid expenses. If there’s money left in the individual’s sub-account, the nonprofit administering the trust can retain the funds and use them as they see fit. The funds will not be returned to the individual’s family or other beneficiaries.