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Pooled Special Needs Trusts: Preserving Assets for People with Special Needs
For families providing care and financial support for loved ones
living with a disability, the thought of not being there can be
overwhelming. Planning for the future is sometimes put aside to
deal with the "here and now". But when an individual lives with a
disability that can affect their ability to work or manage their
finances, parents or caregivers must determine what assets, income,
and other resources their child or adult family member with special
needs will rely on in the future and who will help them to manage
those resources.
A special needs trust is a tool that allows funds to be set aside
for an individual with a disability to be used for supplemental
needs that will improve their quality of life. Proper
administration of a special needs trust can benefit an individual
who needs assistance managing their finances and also ensures that
the funds are available solely for their benefit.
Special consideration should be made for individuals receiving SSI
and Medicaid benefits. In order to qualify for SSI and Medicaid, an
individual cannot have more than $2,000 in cash assets. When an
individual with a disability receives a sum of money from an
inheritance, settlement due to an injury, social security back
payment, monetary gift, or sale of an asset, those funds threaten
the individual's eligibility for SSI and Medicaid benefits.
However, funds that are placed in a special needs trust will not
jeopardize these crucial benefits.
Estate planning attorneys, financial planners and case managers
can give their perspectives on long-term financial planning that
will best suit your particular situation. Once you are ready to
establish a special needs trust, you must select a trustee. The
trustee manages disbursements, invests the funds, reports to
government agencies and keeps up with changing regulations. Because
the regulations are complex and constantly changing, it is
important to select a trustee that specializes in these types of
trusts.
One option is a pooled special needs trust, which is established
and administered by a nonprofit organization. A separate account is
established for each Beneficiary, but the funds are "pooled" to
provide greater investment opportunities and lower administrative
expenses. Participating in a pooled special needs trust, such as
those offered by Commonwealth Community Trust (CCT), can be an
affordable and effective option for families and individuals
looking to establish a special needs trust.
Karen Currie is a Trust Associate with Commonwealth Community Trust (CCT), a non-profit organization that administers third-party funded and self-funded pooled special needs trusts for individuals with disabilities. For more information, call toll free at (888)241-6039, or visit: www.commonwealthcommunitytrust.org.