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How does a pooled trust help someone with special needs?

| May 4, 2021 | Blog |

Your loved one with special needs must follow the rules in order to remain eligible for certain government programs.

A pooled trust provides the beneficiary the opportunity for a better quality of life without jeopardizing the benefits of programs such as Supplemental Security Income or SSI.

Types of trusts

There are three types of trusts for people with special needs. The first-party trust contains assets that belong to the special needs person, such as an inheritance or the settlement from a motor vehicle accident. The third-party trust holds funds contributed by those who want to help this person. Finally, the pooled trust consists of funds from a variety of special needs beneficiaries and serves as an alternative to the first-party trust.

About pooled trusts

In order to continue receiving government benefits, your loved one with special needs must not keep more than $2,000 in his or her bank account. However, any access can go into a pooled trust as established and administered by a nonprofit organization. This kind of arrangement allows beneficiaries to pool resources for investment purposes yet maintains individual accounts that serve each beneficiary’s needs. Funds in an individual account are mainly used for the recipient’s day-to-day living expenses.

Serving needs

A person with special needs can work with a trust adviser who will help tailor a distribution plan for pooled funds that best suits his or her circumstances. In addition, a pooled trust participant who wishes to remain on essential government programs like SSI can transfer excess funds to a pooled trust without having to depend on the help of a family member. More information on pooled trusts is available at https://www.youtube.com/watch?v=-tzyp_J–lY Video.

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