Pooled Trusts Overview for Attorneys
By the time you have resolved a client’s case, you have worked long and hard to secure the best possible outcome for him or her. Our job starts where your job ends. We protect eligibility for needs based government benefit programs for personal injury victims. SSNPT can be utilized in every state where it is allowed and we abide by all state specific rules for their respective Medicaid programs. Medicaid programs are regulated differently by each state even though the program is partially federally funded. A trust such as the SSNPT has inherent spendthrift protections which protects your client from those who might prey upon them after they receive a settlement.
Settlement Solutions National Pooled Trust specializes in working with personal injury victims from single event cases and mass torts. Our team of experts can help with the planning necessary to fully protect government benefit programs. We have a national network of elder law attorneys who can handle the creation of the legal documents to join the SSNPT and make sure that your office is relieved of the work needed to set up as well as fund the pooled trust sub-account for your client. The process to establish the pooled trust sub-account isn’t complicated and typically can be accomplished relatively quickly with a competent adult. If a case involves a minor or someone who isn’t competent, that can make the process somewhat longer but still usually relatively quick.
The information below is meant to give you an overview of the issues when you settle a case with a client who has needs based government benefits.
Does My Client Need to Create a Special Needs Trust?
To answer this question, first there are some answers you will need to have from your client. The first question is whether they are disabled under the Social Security definition of disability. If the answer to that question is yes, then the next question is whether the client is receiving any type of needs based benefits such as Supplemental Security Income (SSI) or Medicaid. If the answer is yes, then a pooled special needs trust may be appropriate to protect eligibility for those needs based benefits. Below is an over of the Settlement Solutions National Pooled Trust and more information on public benefits as well as how they are protected through the use of a special needs trust.
Pooled Special Needs Trusts were created by the “OBRA 1993” Omnibus Budget Reconciliation Act, currently codified at 42 U.S.C. 1396p(d)(4)(C), to help persons who are disabled as a result of their injury or disability keep their eligibility for public assistance. Allowing these individuals to gain eligibility for Medicaid or Supplemental Security Income (SSI) and obtain care for medical costs unrelated to their settlement without having to use settlement funds provides a significant planning option for injury victims.
The Settlement Solutions National Pooled Trust is the first such trust created and designed specifically for injury victims when they settle their cases. We also have designed our pooled trust to be the perfect solution for mass tort injury victims by offering not only Medicaid preservation but also Medicare preservation for those that are dual eligible with our proprietary pooled trust/Medicare Set Aside sub-account. Below you will find more information on Special Needs Trusts.
Unlike SSDI and Medicare, Supplemental Security Income (SSI) and Medicaid are income and asset sensitive public benefits that require planning to preserve. In Florida (and most states), one dollar of SSI benefits automatically brings Medicaid coverage. This is very important, as it is imperative to preserve some level of SSI benefits if Medicaid coverage is needed in the future. SSI is a cash assistance program administered by the Social Security Administration. It provides financial assistance to needy aged, blind, or disabled individuals. To receive SSI, the individual must be aged (65 or older), blind or disabled and be a U.S. citizen. The recipient must also meet the financial eligibility requirements.
Medicaid provides basic health care coverage for those who cannot afford it. It is a state and federally funded program run differently in each state. Eligibility requirements and services available vary by state. Medicaid can be used to supplement Medicare coverage if the client has both programs. For example, Medicaid can pay for prescription drugs as well as Medicare co-payments or deductibles.
A Special Needs Trust (SNT) is required if the client is receiving Supplemental Security Income (SSI) or Medicaid. A SNT is a trust whose corpus or any assets held in the trust do not count as resources for purposes of qualifying for Medicaid or SSI. Thus a personal injury settlement can be placed into a SNT so that the victim can continue to qualify for SSI and Medicaid. Federal law authorizes and regulates the creation of a SNT. 42 U.S.C. §1396p(d)(4)(A)-(C) governs the creation and requirements for such trusts. First and foremost, a client must be disabled in order to create a SNT. There are 3 primary types of trusts. First is the (d)(4)(A) trust which can only be established for those who are disabled and are under age 65. This trust is established with the personal injury victim’s settlement money and is established for the victim’s own benefit. However, it can only be created by a parent, grandparent, guardian or by court order. Second is a third party SNT which is funded and established by someone other than the personal injury victim (i.e., parent, grandparent, donations, etc. . .) for the benefit of the personal injury victim. The victim still must meet the definition of disability. Third is a (d)(4)(C) trust typically called a pooled trust Special Needs Trust that may be established with the disabled victim’s funds without regard to age restriction and may be established by the victim him or herself (unlike the (d)(4)(A)).
A (d)(4)(A) SNT can only be established for those 65 or under. If you have a client 65 or older that is disabled the only trust option is a pooled trust. A pooled trust is established and managed by a Non-Profit. The trust has to maintain separate accounts for each trust beneficiary, but the funds are pooled for purposes of investment and management. Any funds that remain in the trust beneficiary’s account at death must be retained by the Trust or used to reimburse Medicaid. There are other options such as a personal services contract or the purchase of exempt assets that can keep the nursing home resident eligible for public benefits.