(781) 395-0020 info@dowley.legal
One aspect of estate planning that may come up as you work with a trusted attorney is the idea of a pooled trust. You may be wondering What is a Pooled Trust and how will it impact or affect you?

Here you can learn the purpose of a pooled trust and if it’s the right choice for you. Before you can decide if you want to move forward with having one you must know what it is and the ins and outs of what it entails. Continue reading to learn more and why this may be the workaround you need if you live in Massachusetts.

How Pooled Trusts Work

The first question to address and understand more is how pooled trusts work. For starters, it’s a trust that’s opened and administered by a nonprofit organization to protect the assets of people with disabilities. You should know that younger people who have special needs or the elderly who require intensive care can qualify.

How it works is that several beneficiaries pay into one single trust. Although the money is being pooled, each person will maintain their own individual sub-trust. Trust administrators then use the pooled money to make investments. The beneficiaries are typically required to pay small administrative fees for the service.

How it Relates to MassHealth

One workaround to the MassHealth strict asset limits is using a pooled trust. This is because the money in a pooled trust is exempt from this asset limit. It’s an especially wise choice for people with disabilities. Without spending down all your assets, you can use a pooled trust to increase your chances of becoming eligible for MassHealth. You can strategically manage your assets and not let the enforced restrictions keep you from not being covered by MassHealth.

Pooled Trust Vs. Special Needs Trust

While pooled trusts are similar to a special needs trust, they are not the same. One difference is that pooled trusts are managed by a third-party administrator, while someone close to the beneficiary usually oversees the special needs trust. Another significant difference between the two types of trusts you should realize is that a special needs trust has an age limit, whereas a pooled trust does not. What this means is that MassHealth applicants who are over the age of 65 can participate in them. Finally, special needs trusts tend to have higher administrative fees associated with them.

The Long-Term Impact

Before deciding to choose a pooled trust, you must understand where your pooled assets go when you die. For instance, the funds you’ve paid into the pooled trust do not become part of your probate estate and automatically get passed on to the named beneficiaries. The primary beneficiary of the pooled trust is MassHealth. After you die, the agency can choose to recover money from your sub-trust as reimbursement for any benefits you received while you were alive. If there is any money left, it can then go to the secondary beneficiaries that were named by the deceased.

Benefits of A Pooled Trust

You may be curious about and glad to know that pooled trusts also offer many benefits. For instance, they allow you to quality and maintain eligibility for MassHealth. You can also sleep soundly knowing you have protected funds at your disposal to use as you please that will enhance your quality of life. You’ll not only be able to get the care you need but will have peace of mind knowing you can pay your medical bills. This will be beneficial as you won’t have to worry about spending down funds quickly. It can also, in many cases, be more affordable and practical than choosing to open a traditional and separate special needs trust.

Next Steps

It’s in your best interest to educate yourself on what a pooled trust is as a first step in the right direction. However, after you have informed yourself of what it is and the benefits then it’s best to consult with an estate planning attorney who can guide you through the next steps and answer any additional questions you have.

Now is the time to think about joining a pooled trust if you or a loved one is considering and wants to apply for MassHealth coverage. Please give us a call at Dowley Law and we’d be happy to guide you through the process and ensure you understand more about pooled trusts and other estate planning details before you make a final decision about what to do with your money. Lauren Keane Dowley and her team provide the care and compassion necessary to assist you with ensuring you and your loved ones are provided for now and in the future.