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Understanding a Pooled Trust in California

The Elder & Disability Law Firm, APC Feb. 14, 2024

A pooled trust, also known as a d4C trust, is established and managed by a non-profit organization.  

A pooled trust works by pooling the resources of many beneficiaries, but each beneficiary has a separate account for their personal use. When the beneficiary passes away, a portion of the remaining assets may be kept by the trust to assist other members. This structure helps manage the assets effectively, allowing for a higher quality of life for the beneficiary. 

Contributions to a pooled trust can come from the individual's income, or through assets such as a legal settlement or an inheritance. The funds in the trust are then pooled with other members' assets for investment purposes, which often leads to higher rates of return due to the larger investment pool.  

However, individual accounts are maintained for each beneficiary to track their contributions separately. These funds can be used to pay for a variety of expenses that benefit the individual, such as medical and dental care, education costs, home furnishings, and personal care items, while not jeopardizing eligibility for government assistance programs like Medicaid or Supplemental Security Income.  

The non-profit organization responsible for the pooled trust oversees the management of the funds and ensures that disbursements are made in compliance with federal and state regulations. 

The Elder & Disability Law Firm, APC is experienced in helping clients navigate through the process of establishing a pooled trust. They've worked with numerous Southern California residents, providing them with personalized and comprehensive advice on how to best utilize this type of trust. 

Benefits of a Pooled Trust

Trusts alone have a variety of benefits, like avoiding probate and protecting assets from creditors. But a pooled trust offers other specific advantages, including: 

  • Disabled clients under age 65 can qualify for funds in the trust. 

  • Professional trustees who work for the non-profit act as trustees, eliminating the need to find a suitable trustee and compensate them for their time. 

  • Protects funds for expenses not covered by Medicaid or SSI like alternative treatments or dental care. 

  • Allows a person to remain in their home when their income and assets are above limits for a program. 

  • Fails to qualify for the Medicaid Waiver because of income and assets exceeding the cap. 

  • Protects someone receiving services through Medicaid who receives a windfall e.g. an inheritance. 

In summary, a pooled trust represents a practical and strategic financial tool for disabled individuals, especially for those looking to maintain their eligibility for public assistance programs while also enhancing their quality of life.  

By entrusting their assets to a pooled trust managed by a dedicated non-profit organization, beneficiaries avail themselves of professional asset management, safeguarded expenditures, and the peace of mind that comes with reliable financial planning.  

The Elder & Disability Law Firm, APC, is equipped to guide clients in Southern California through the intricacies of pooled trusts, ensuring that they make informed decisions tailored to their unique circumstances. 

An Example: d4c Pooled Trust and Medicaid

To fully grasp how a pooled trust can be helpful for disabled individuals, let's look at an example of how an individual may utilize a d4c pooled trust to retain assets and qualify for Medicaid: 

A 63-year-old client, Linda, has a permanent disability which qualifies her for SSI and Medicaid. Her mother dies with a will, leaving Linda over $60,000. Without proper planning, this windfall could prevent Linda from continuing to receive her much-needed SSI and Medicaid. Gifting the assets away or spending them down would render her ineligible for a potentially damaging period of time. 

By placing the inheritance into a d4c pooled trust, Linda can still receive the services she needs to maintain a quality of life, while still receiving benefits from the inheritance. When funds are transferred into a d4c pooled trust, Linda would remain below the threshold for SSI and Medicaid. 

The money that was placed in the d4c pooled trust could be used to pay for items that Medicaid and SSI do not cover. The administrators of a pooled trust are well-informed about allowable expenditures and maintain control over the distributions. 

The Elder & Disability Law Firm, APC, has a deep understanding of these benefits and can guide clients toward making informed decisions. Their dedication to serving clients throughout Redlands, Riverside, Rancho Cucamonga, and Palm Springs makes them a reliable partner in estate planning. 

Make Key Decisions With Confidence

Understanding a pooled trust can be challenging, but with the right guidance, it can be a beneficial tool for individuals with disabilities. The Elder & Disability Law Firm, APC, is committed to providing clear, concise, and personalized advice to their clients. They understand the unique needs of each client and strive to provide the best possible service. 

If you're considering setting up a pooled trust or want to learn more about your options, reach out to The Elder & Disability Law Firm, APC. They're ready to assist you with your estate planning needs.