“Pooled” Special Needs Trust in Georgia

In our April newsletter, we discussed the requirements of special needs trusts. We also mentioned that there are multiple types of special needs trusts. The best type to create depends on the situation. One option for Georgia families we are focusing on today is called a “pooled” special needs trust (also knows as a supplemental needs trust).

Betty is 60 years old, has frontal lobe damage and needs help with multiple activities of daily living (ADLs).  She needs to be eligible for Medicaid since her health is poor and she requires moving into a skilled nursing facility for care. Betty is eligible for Medicaid but is going to be receiving $25,000 from her father’s life insurance as he recently passed. The only family Betty has left is a brother who is still working full-time and he has no idea what it means to be a trustee. Betty, with guidance from her attorney, decided that a “pooled” special needs trust would be a good way to keep her eligible for Medicaid, preserve the money she is getting from the life insurance policy, and utilize a professional trustee. Why did Betty’s Hurley Elder Care Law attorney recommend a “pooled” trust for her situation?

A “pooled” special needs trust is one that must be established by a non-profit organization.

In Georgia, we have the Georgia Community Trust of BDI. This is a common trust where funds are held together or “pooled” for the benefit of many disabled beneficiaries. As with all special needs trust, this type of trust must be set up before the disabled beneficiary turns 65 or the transfer to the trust would be disqualifying for Medicaid purposes.

In addition, a “pooled” special needs trust must be irrevocable. This means that changes are not permissible after the trust is set up. Finally, with this type of trust, the non-profit organization can keep a portion (or all) of the money remaining in the trust after the disabled person’s death.

Why would anyone want to use a “pooled” special needs trust?

For starters, setting up a “pooled” special needs trust allows for coordination with current planning, as well as family members who may want to contribute to the funds of the disabled person. Plus, even though it must be irrevocable, it does allow for some flexibility in case there are changing needs.

The biggest reason some choose to utilize a “pooled” special needs trust is to take advantage of the professional trustee.

A professional trustee can be extremely beneficial when there are no family members to serve as the trustee. Even if there are family members, having a professional trustee can help to avoid conflict—let’s face it, families are complicated! In addition, a professional trustee can ensure that money held in the “pooled” trust is invested and handled properly.

A “pooled” trust works for Betty because she can qualify for Medicaid to get care in a skilled nursing facility, still receive her life insurance proceeds and have a professional trustee manage her trust. This is a ‘win’ for Betty.

For more information on “pooled” special needs trust in Georgia, check out the Georgia Community Trust of BDI here or contact our office at (404) 843-0121. Also, Please join us for a FREE webinar, “Special Needs: Unique Challenges, Creative Solutions” on Wed. April 28 from12-1 PM to learn more. Register here.