Pooled Trusts for Maintaining Medicaid or SSI Eligibility

March 26th, 2014

There are lots of people receiving state benefits such as Medicaid or SSI. The problem often arises where an individual receiving those benefits becomes entitled to money, which may terminate eligibility for those state benefits. People receive inheritances, personal injury awards, and other monies that the state does not permit, unless benefits are terminated. Occasionally, poor planning or circumstances out of your control require the payment of assets to individuals with Medicaid or SSI, forcing the individual to make a difficult decision—accept the money and lose Medicaid or SSI—or give the money to the state and continue receiving Medicaid or SSI.

There are trust options for handling those types of cases. Pooled trusts are established for the benefit of individuals receiving Medicaid and SSI, which permit monies in excess eligibility guidelines to flow to the individual without losing benefits. A trustee is free to hold title to the money, yet make proper disbursements to the individual. Those disbursements can be for numerous things—except for food, shelter, or medical expenses already covered by Medicaid. The theory is that because SSI and Medicaid cover those most basic services, then you can’t use money from other sources to pay for those services.

So what happens to assets held in trust, when the beneficiary dies without having expended all monies in the pooled trust? Normally any assets are left to non-profits or the state of Ohio. However, changes in the law may now permit a beneficiary to designate family members as beneficiaries upon death.

In sum, pooled trusts are another tool in the toolbox that permits Medicaid and SSI recipients to continue receiving benefits without the risk of terminating Medicaid and SSI. We will know what type of cases may be appropriate for a pooled trust. So if you or another Medicaid or SSI recipient anticipates receiving money because of a motor vehicle accident, inheritance, or other lawsuit, do not hesitate to contact us.