Pooled Trusts for the Benefit of Disabled or Handicapped Persons
What Is A Pooled Trust?
How Does It Protect My Family Member?
How Can It Be Used to Help a Disabled Person?
A pooled trust, also known as a “(d)(4)(C) trust,” is a special needs trust with a twist. While an individual special needs trust is created by someone for the benefit of a specific beneficiary who is often a family member, a pooled trust is established by a non-profit organization, with individual beneficiaries benefitting from accounts within the larger trust. In other words, the assets of many people with special needs are “pooled.” Because a pooled trust accepts contributions from many beneficiaries, the trust can make more stable investments may provide additional management services that a third party special needs trust might not be able to afford. On top of these benefits, transfers into a pooled trust, like transfers into a first-party special needs trust, do not prevent a person with special needs from accessing government benefits.
Although the funds placed in a pooled trust are invested together, each beneficiary’s account remains accessible only for his or her sole benefit. Depending on the trust, a beneficiary might work with a NJ Special Needs Trust attorney or other trust advisor to tailor a funds distribution plan that fits his lifestyle. As with an individual special needs trust, funds in a pooled trust are used to supplement a beneficiary’s government benefits, and the funds can be used to pay for items which are not available through government benefit programs. Importantly, beneficiaries looking to spend down their assets in order to qualify for, or remain on, government benefits can transfer funds directly into a pooled trust account without having to rely on a family member’s help.
Like most trusts that allow people with a disability to qualify for benefits, pooled trusts come with a catch. As with an individual (d)(4)(A) trust, upon a beneficiary’s death, New Jersey requires that the funds held in a pooled trust account must be used to reimburse the government for any medical services provided to the beneficiary. However, the state may allow the non-profit organization that established the pooled trust to retain a percentage of a deceased beneficiary’s account to support its mission.
When should a person with special needs consider a pooled trust? Each individual’s situation is different. A person with a disability often uses a pooled trust when he or she does not have someone to create an individual first-party special needs trust for her and she needs to transfer funds out of her name in order to qualify for, or maintain, government benefits. A person with a disability who has only a small amount of money in her name may like the low cost of a pooled trust. Others appreciate the fact that their funds will be used to help others with special needs.
I was referred to Hanlon Niemann. I was warmly greeted and my appointment promptly kept. I was given all the time I needed to ask questions and talk about my needs and concerns. I was quoted a fee that was appropriate and reasonable for my matter. My attorney gave me answers and advice. He was a counselor at law and in life. Calling Hanlon Niemann was the right decision.
—Nick Alfano, Morganville, NJ
Pooled trusts are helpful for people with special needs. Of course, the best way to learn more about pooled trusts is to speak with a qualified Special Needs Attorney.
If you have any questions, contact Fredrick P. Niemann, Esq.
toll-free at (855) 376-5291,
He is happy to answer your inquiries.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Special Needs Trust Attorney