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ALTERNATIVE TO SPECIAL NEEDS TRUSTS
By Marisa A. Corvisiero, Esq.
Special Needs Trusts are trusts that are set up by a third
party for the benefit of a disabled or elderly beneficiary. Third party means
that the person funding the trust, the grantor, can not be the same person as
the beneficiary. If a grantor takes her own property and uses it to fund a
Special Needs Trusts and names herself as the beneficiary, even if someone else
is appointed as the trustee, the trust is then called a self settled trust and
it will seize to be a proper shelter for purposes of preserving the eligibility
to social benefits such as Social Security Insurance and Medicaid.
As an alternative, an individual who is entitled to such
benefits and receives a large sum of money as a gift, inheritance, lotto
winnings, a settlement or court award may place the said property or funds into
a pooled trust to shelter the money from consideration as a resource when
qualifying for SSI and Medicaid. There is a National Special needs Trust and
almost every state has at least one pooled trust (see list by state).
These Pooled Trusts are non-profit organizations set up as
these specific trusts for the benefit of providing shelter and assistance to
individuals beneficiaries with disabilities. They were expertly set up and
efficiently manage and invest the assets of the fund, which are combined and
invested together. The funds are spent on beneficiaries in proportion with
their respective shares.
Pooled Trusts not only provide the benefit of Special Needs
Trusts to individuals who need to preserve their benefits, but also eliminate
the necessity to appoint and educate a trustee.