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I’m in a Pooled Special Needs Trust – Now What?

I’m in a Pooled Special Needs Trust – Now What?
Special Needs Trusts
Jason Neufeld
May 17, 2020

If you’re interested in this pooled special needs trusts article, it is very likely you already know a bit how PSNTs work. You can read more about pooled special needs trusts (a/k/a d4C trusts) basics by clicking on the links under the resources heading below. Or watch this video: 

Briefly: pooled special needs trusts are a state and federally accepted tool for turning countable resources into non-countable resources so one can obtain need-based benefits (such as Medicaid) or remain eligible for need-based / means-tested benefits after a sudden influx of assets (e.g. personal injury settlement or inheritance). Pooled special needs trusts have the benefit of no age limitation (as opposed to self-settled / d4A trusts, which require the settlor to be under age 65) and professional trustee oversight, albeit for an administrative fee.

But, I receive a lot of questions pertaining to the practical mechanics of how pooled special needs trusts work, most prominently: How are pooled special needs trust funds accessed? 

How do I get money from a pooled special needs trust?

In short: you don’t. But don’t let this scare you. As a Medicaid beneficiary, you still get the benefit of the trust funds, they just cannot be disbursed to you directly – because paying you directly could jeopardize your benefits eligibility. 

After enrolling (completing a pooled special needs trust joinder agreement), the pooled special needs trust company will send you a welcome packet. In the welcome packet, they will include: 

(a)    A copy of the fully-executed joinder agreement;

(b)   Receipt of initial funding (i.e. how much you put into the pooled special needs trust);

(c)    Instructions on how to deposit additional funds if necessary;

(d)   Fee schedule (usually 2% - 3% of assets, which you will know before the pooled trust joinder agreement is signed);

(e)   Pooled special needs trust distribution request forms. You will use this to request a payment by email, fax or mail;

(f)     Verification of who is able to make distribution requests on behalf of the beneficiary (i.e. if multiple children are assisting their parent, a Medicaid beneficiary, they
are able to request distributions if listed and their signature verified).

What happens after I submit a disbursement request to the pooled special needs trust?

The pooled special needs trust trustee will evaluate the request and ensure that they are able to comply in a way that will not jeopardize your benefits. For example, if you submit a request to purchase a car for your child, it will be denied, because making gifts is not allowed – as the money in the pooled special needs trust can only be used for the sole benefit of the beneficiary (i.e. you, the Medicaid recipient). 

As indicated above, the pooled special needs trust trustee also cannot accommodate a request to disburse money to you, the beneficiary directly, this is because the funds can only be used to directly pay for goods and services that are not already covered by Medicaid.

With your disbursement request, the trustee will expect you to include a receipt, bill, invoice or estimate to accompany the request so the trustee can verify exactly where the trust funds are to go and for what purpose. Again, this is to ensure that only appropriate special needs trust payments are made so you can continue to enjoy your Medicaid benefits.

The welcome packet will also explain how to get credit card bills paid and how to reimburse someone else who made a purchase on behalf of the beneficiary (tip: keep receipts for every purchase you want the pooled special needs trust to reimburse) and how third-parties/vendors can be paid directly. Some pooled trusts will be able to provide a debit-type card that will allow for the purchase of medicaid-approved expenses directly from the trust.

Pooled Trusts and SSI Beneficiaries

If you are ALSO an SSI recipient (do not confuse this with SSDI or Social Security Retirement), there are a few additional restrictions that don't apply to those who are on or who seek other Medicaid benefits (such as Medicaid Waiver, ICP or QMB): Mainly: Certain disbursements - known as ISM (in-kind support and maintenance) disbursements - can result in a temporary reduction in SSI benefits.

In the resources section below, I link to another article I wrote about what types of distributions are allowable from a special needs trust (including more details on how ISM distributions can negatively impact SSI benefits)

Finally, you can often setup a schedule of payments for regularly occurring bills (e.g. to home care agencies, ALF payments, FPL or cable bills, etc...)

How complex is the pooled special needs trust distribution request form?

Whoever is requesting the distribution “fills in the blanks” including: how much is to be paid, to whom, and for what purpose. The person making the request will also sign verifying that the disbursement is in the best interest of the beneficiary and for the sole benefit of the beneficiary. The form is then emailed, faxed or mailed to the pooled special needs trust company.

The pooled special needs trust company will also send you periodic statements so you can see exactly how your money has been spent (based on prior requests), how administrative fees are deducted, and what remains in the fund.

I hope this article has helped explain how the mechanics of pooled special needs trust work after enrollment.  

Pooled Special Needs Trust Lawyer Resources and Videos

  1. What is a pooled special needs trust?
  2. What can pooled special needs trust funds be used for? (what are ISM Disbursements)
  3. How Pooled Special Needs Trust works with a Personal Services Contract to preserve funds for caregivers?

Jason Neufeld

Jason Neufeld is the Founder and Managing Partner of Elder Needs Law, a Florida estate planning and elder law firm he created in 2017. With more than 15 years of experience practicing law, he represents clients in a wide range of legal matters, including Medicaid planning, estate planning, elder law, probate, Medicare, and life insurance.

Jason received his Juris Doctor from the University of Miami — School of Law and is a member of the Florida Bar and the Broward County Bar Association. He has received numerous accolades for his work, including being named a Rising Star and Super Lawyer by Super Lawyers and among the Florida Legal Elite by Florida Trend in 2024.

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