What is a special needs pooled trust? Here at the Meurer Law Offices in Denver, we get a number of clients who want to understand more about trusts in general. Today, we want to share more specifically about special needs pooled trust.
If you have someone you love who has special needs or serious disabilities, you may want to consider working with us on special needs planning which will provide peace of mind.
Special Needs Trusts
In general, a special needs trust is a trust to provide for someone who is disabled. Such trusts can be created without jeopardizing any governmental assistance. For someone who is disabled, a special needs trust, or D4A, is often the best way to leave money for their care while allowing them to receive additional assistance as needed. Though the money cannot be provided directly to the beneficiary, the trust can be used to purchase necessities which can then be provided to the beneficiary.
Special Needs Pooled Trusts
In lieu of naming a person as a trustee, a special needs pooled trust is run by a non-profit organization. The non-profit is set-up specifically to administer a master special needs trusts for various beneficiaries with disabilities. Assets are combined, allowing investment and management to occur in a streamlined fashion. Funds are used on beneficiaries proportional to their share of the total fund.
Each special needs pooled trust is going to be different from other pooled trusts. The services provided by the trust will vary, as will the fees and contracts. Some are very complicated and some are fairly simple. Some offer complete care of the beneficiary, while others simply manage the financial aspect. Choosing one can be difficult.
If you need assistance choosing a special needs pooled trust, come see us here at the Meurer Law Offices in Denver. We can help you find a trust that matches your situation and will meet the needs of your beneficiary.
Pooled Trust Benefits
Here are a few of the benefits of a special needs pooled trust:
- Trust managers are knowledgeable about rules for Medicaid, SSI with respect to income and resources. Having someone who deals with these agencies on a regular basis reduces the possibilities for mistakes.
- Trust directors frequently have relatives with disabilities, making them more understanding of the needs of people with disabilities.
- A special needs pooled trust can provide funds, even if you don’t have substantial sums of money to leave your loved one.
Pooled Trust Limitations
Though special needs pooled trusts can be a great thing for many people, there are a few limitations that should be examined.
- As with everything, some of the trust organizations are excellent and some are not as good. It is important to recognize that management of the organization can change and the quality sometimes changes with it. Some of these organizations may go out of business.
- Some trusts only distribute assets at specific times during the month. This may not work if an individual needs more frequent distributions.
- Some special needs pooled trusts can be quite expensive. It is important to understand the full extent of the fees prior to signing up. Often, there is a set-up fee that is only charged at the beginning, but the fee can range from hundreds of dollars to thousands of dollars. Additionally, there is usually an annual fee which is usually a percentage based fee. For modestly funded assets, a special needs pooled trust can deplete the funds quickly, depending on the fees.
- Pool trusts are considered pretty inflexible. Once a pooled trust has assets it is almost impossible to move assets to a different trust, even if the trustee is doing a poor job.
- Non-traditional assets are generally not managed by special needs pooled trusts. If your trust would include real estate or other non-monetary investments, a special needs pooled trust may not be the best option.
Finding a Special Needs Pooled Trust
Pooled trusts are required to adhere to very strict state governed rules. As a result, special needs pooled trusts only take in trusts from residents and beneficiaries that reside in the same state. If you need assistance finding a special needs pooled trust, we here at Meurer Law Offices in Denver can help you find one to suit your situation.
It is important to thoroughly research your options, especially any particular pooled trust you may be considering. Be sure to compare programs very carefully. Consulting with an attorney can help you determine if your choices are best considering your specific situation. Be sure to meet with representatives from the pooled trust program and ask all of your questions. It is important that you feel the trust will serve your beneficiaries needs.
When You Join a Pooled Trust
When you decide you are ready to join a special needs pooled trust, generally you will sign a joinder agreement. At this time, you will be generally be expected to pay a non-refundable enrollment fee. Usually, joinder agreements connect your beneficiary to the master trust. It will describe your duties as the grantor (person supplying the funds). Additionally, the agreement details what will occur if you decide to withdraw funds at a later time and outlines what happens to any remaining funds when the account terminates.
Some joinder agreements will allow you to determine disbursements once the trust is in effect and funded. Once you die, the joinder is irrevocable. This means that any funds placed in the special needs pooled trust stay with the trust and the trustee is responsible for disbursing them according to the trust’s terms. If you would prefer, you can direct your executor to join the trust after you die, rather than signing up for one while you are alive.
What is a special needs pooled trust? It is a way to ensure care for your disabled loved ones. If you want to learn more about special needs pooled trust, contact us here at the Meurer Law Offices in Denver. We can help you decide the right option for you and your loved one.