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. Most special needs trusts are created for the benefit of a beneficiary who is often a family member. A pooled trust, however, is established by a non-profit organization, with many individual beneficiaries all benefitting from the funds deposited within a 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 secure investments and provide additional management services that a third party special trustee might not be able to afford. On top of these benefits, transfers into a pooled trust qualify a person with special needs for 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 customize a fund distribution plan that fits his or her 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 a government benefit program. Importantly, beneficiaries do not have to spend down their resources in order to qualify for, or remain on, government benefits and can transfer their 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. Upon the 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