A pooled special needs trust is a “pooled” trust combining the assets of many individuals with each disabled beneficiary having a separate sub-trust. The pooled trust is run by non-profit organizations. For Indiana residents, we have the SWIRCA Pooled Trust (812–492-7441) and the Arc of Indiana Master Trust (317–977-2375). Both have great support teams and will answer any questions you may have.
A pooled trust is established for the sole benefit of a disabled individual that will not cause the disabled person’s government benefits such as Medicaid or SSI to be reduced or jeopardized. The disability can be physical, mental, emotional, or intellectual as determined by the Social Security Administration. A pooled trust is professionally managed with reasonable fees. Many clients who have disabled children/heirs can set up an irrevocable trust with these pooled trusts during their life, or through their estate planning. It may be difficult to have a family member willing or able to handle the administration including the proper disbursements of funds to the disabled beneficiary. Also, a stand-along personal special needs trust may not have enough funds to allow a corporate trustee to handle the responsibilities of trust. But a pooled trust has professional management at an affordable price without having to have a large amount to fund the trust.
A first-party trust is money that is placed into a pooled trust from the disabled beneficiaries’ own funds such as earnings from employment, Social Security funds, lawsuit settlements, and inheritance or gifts. A third-party pooled trust account are funds from a parent, grandparent, friend, or a fundraising event to fund an account for a disabled beneficiary. If any funds of the third-party pooled trust that are left after the passing of the beneficiary, the donor can direct where the balance is paid.
The funds in the pooled trust can be used for many goods and services. Some examples (but the list is long) of goods are as follows: furniture, household appliances/products, pre-paid funerals, and tuition. Examples of some services are cell phone services, internet, cable, transportation, music lessons, attorney/accountant fees, and maid services.
The pooled trust sub-account can be funded during a person’s life, or later, at passing. But remember it is irrevocable and cannot be reversed or undone. The pooled trusts can provide peace of mind and provide professional management of funds to provide for the disabled person.