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Using Pooled Trusts in Medicaid Planning

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.

Over the last few years, our practice has dramatically increased as it relates to assisting individuals in qualifying for Medicaid benefits when entering either an assisted living or nursing facility. There are a number of different techniques that can be used when working on Medicaid planning ideas. A number of times that planning involves making gifts and establishing specific types of trusts.

One type of trust that can be very useful when developing an asset protection plan involves the use of a Pooled Trust. A Pooled Trust is a type of trust that is managed and operated by a charitable organization. Currently there are two charitable organizations in Ohio that operate Pooled Trusts.  Those organizations are Community Fund Management located in Cleveland and The Disability Foundation located in Dayton. 

Historically, Pooled Trusts were established to assist disabled individuals obtain Medicaid benefits while being able to maintain assets to pay for ongoing medical expenses.  For example, if an an individual was in an automobile accident through no fault of their own and received a liability settlement but still had ongoing medical expenses, that individual would not be able to obtain Medicaid benefits for health insurance reasons to pay for expenses because the settlement proceeds made them over-resourced.  Currently under certain Medicaid programs, an individual may not have more than $2000 of assets.  The government decided that this result was not fair.  Therefore disabled individuals are permitted to transfer their settlement funds or a portion of them to a Pooled Trust and still qualify for Medicaid.  This is because the funds in the Pooled Trust are not counted when determining if the individual has more than $2000 of assets.  

An assisted living resident or nursing home resident is considered disabled under the Pooled Trust rules.  This type of trust allows a disabled individual who may be going into a nursing home or into an assisted living facility to deposit funds into a Pooled Trust for their benefit.  Those funds can be used over the individual’s lifetime to provide various supplemental types of services, while allowing that individual to become eligible for Medicaid or maintain their eligibility for Medicaid if they are already on Medicaid. Therefore, a Pooled Trust can be very beneficial in Medicaid planning.  A Pooled Trust can be used when trying to qualify an individual for Medicaid initially.  A Pooled Trust can be used when maintaining an individual’s Medicaid eligibility when that individual receives an asset through an inheritance from a relative, if that would make the individual ineligible for Medicaid  because their assets are over $2,000.

This type of trust is also sometimes referred to as a Medicaid Payback Trust.  The reason is that upon the death of the person who established the trust, any assets remaining in this type of trust will need to be paid to the Ohio Attorney General’s office under the Medicaid Estate Recovery Program to the extent that the deceased individual had received Medicaid benefits during life.

Please consider the use of a Pooled Trust when trying to qualify a loved one for Medicaid.

NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.

James F. Contini II, Esq.
Certified Specialist in Estate Planning,
Trust & Probate Law by the OSBA
Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.
405 Chauncey Avenue NW
New Philadelphia, Ohio 44663
Phone:  (330) 364-3472
Fax:  (330) 602-3187

Email:  jcontini@kwgd.com

 
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