Pooled Trusts

OBRA 1993 allows a charity to establish and manage a special needs trust called a Pooled Trust. The Pooled Trust is an exception to the OBRA '93 rule that trusts will be considered as countable assets for qualification for most public benefits. Medicaid and Supplemental Security Income (SSI) provide a basic level of support for food, shelter, and medical care. A Pooled Trust can fill the "gap" between basic support and the needs and comfort of a beneficiary and supplement the basic support.

In a Pooled Trust, the income and assets of a number of disabled persons may be managed by a not-for-profit association. The SSI definition of disability is used. Separate sub-accounts are maintained for each beneficiary. Upon the death of a beneficiary, the funds remaining in that beneficiary's account are retained by the trust if the Pooled Trust agreement so provides. An advantage of the Pooled Trust is that the corpus of the trust is not considered an available resource. A community trust already would exist and would not have to be created each time a new beneficiary is added. The community trust requires only a joinder agreement for new beneficiaries.

For SSI purposes, disbursements from the trust will be counted as income unless they are "in-kind" payments by the trustee to a third-party that result in the beneficiary receiving items which are not food or shelter. If the in-kind payments are for food or shelter, then SSI has presumed maximum value (PMV) rules, to calculate how much will be deemed as income and thus reduce the individual's SSI benefits somewhat. Income paid directly to the beneficiary will reduce benefits dollar for dollar.

This means that if a Beneficiary is on SSI, disbursements cannot be used for food and shelter without affecting their SSI benefits. However, if a Beneficiary is only on Medicaid and not on SSI then disbursements can be made for virtually any need or desire, provided the payment is not made directly to the Beneficiary. The purpose of a Pooled Trust is to supplement public benefits and therefore protect Medicaid eligibility.

Types of distributions not considered food or shelter might include:
• Clothing
• Attorney's fees
• Guardian's fees & Services of a care manager
• Non-refundable airline tickets
• Stereo system, TV, Movies
• Medical insurance
• Telephone and cellular phone bills
• Vacation and Travel expenses of relatives
• Tax payments
• Medical treatment such as alternative health procedures or alternative edications
• Handicap vans