Who Is a Pooled Special Needs Trust Best Suited For?

Young boy with special needs sits in a wheelchair while making dramatic arm movements in a gym facility

If you’d like to create a special needs trust for your loved one, you may have questions about which type is best for you and your particular circumstances.

There are several different types of special needs trusts, including:

Each type of trust has its own unique implications, so it’s wise to fully understand each kind before choosing one for your family member’s inheritance.

Pooled Special Needs Trusts

A pooled special needs trust is managed by a non-profit organization instead of a single trustee. It is designed to protect a physically or mentally disabled person’s assets while still ensuring the individual can receive government aid.

In order for an individual to qualify for government assistance, such as Medicaid and Supplemental Security Income (SSI), he or she may not own more than $2,000 of assets.

A pooled special needs trust allows a disabled individual to retain unlimited assets to help cover their needs without disqualifying him or her from government assistance. The reason for this is because the assets contained in a properly set up special needs trust are not included in an individual’s resources regarding government benefits eligibility.

Who Can Benefit From a Pooled Special Needs Trust

This type of trust can be beneficial to families who would like the benefits of a special needs trust without the burden of setting up and administering a separate trust.

If you do not have the training, time, or other resources needed to successfully manage a trust, a pooled special needs trust may be right for you. Pooled special needs trusts are typically administered by professional administrators, and the funds that are transferred into the pooled trust are then put together and invested by an investment manager.

Since pooled trusts allow contributions from several beneficiaries, these trusts should be able to make more stable investments and provide extra management services that other types of special needs trusts may not be able to provide.

The following are some other elements of pooled special needs trusts you should consider before deciding to create one:

  • For third-party assets, when the beneficiary passes away, the pooled trust will typically keep some of the beneficiary’s trust account to assist in the funding of other pooled trusts.
  • The manager chosen by the non-profit organization will manage the trust, rather than a friend or family member who has a personal relationship with the beneficiary.
  • A non-profit organization controls the trust’s investments and disbursements. Once you turn over your money to the pooled trust, you cannot control how it is spent or invested.

The Takeaway

Overall, pooled special needs trusts are a great option for those who have a small portion of funding for the trust or are in a situation where there are no viable options to serve as the trustee.

Contact our office right away to learn which type of special needs trust is best for you and your family.

Call Legacy Enhancement Trust today at (888) 988-5503 to or reach out to us online to learn how we may assist you!

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