Common Misconceptions About Pooled Trusts

Pooled trusts are valuable tools for those in need of long-term care when their income exceeds Medicaid’s limits. They present a viable way to gain and maintain Medicaid eligibility for many seniors, people with disabilities, and others. But there are some misconceptions surrounding these trusts, which are valuable tools for those in need of long-term care when their income exceeds Medicaid’s limits.

Here are some common misconceptions about pooled trusts. 

Misconception #1: Pooled trusts are only for rich people.

Pooled trusts are designed to shelter monthly income that exceeds the limit set by Medicaid programs. By putting income over the limit into this type of trust, you avoid having to spend it down while being able to pay other approved living expenses.

Misconception #2: Pooled trusts are solely for the elderly.

Although the elderly may make up the majority of those who decide to join a pooled trust in order to qualify for certain government benefits, a pooled trust can be joined by a person of any age, assuming they meet the other criteria set by the pooled trust, such as being disabled.

Misconception #3: Pooled trusts are permanent.

Pooled trusts are intended to be long-term solutions to the problem of having monthly income over the limited to qualify for Medicaid without a spenddown. However, pooled trust membership can be cancelled, and making the decision to establish a pooled trust account does not mean you have to keep it forever, especially if your circumstances change.

Misconception #4: You lose all control of your income when joining a pooled trust.

While the organization managing the pooled trust account will be writing the checks to actually pay your bills, that does not mean that you lose control of your income. Your income is still used for your benefit to pay for your qualified living expenses. Although there will be items that the pooled trust cannot pay for, because to do so would go against Medicaid guidelines, you largely retain control over what you buy and what bills are paid using the income you deposit into the pooled trust.

Misconception #5: Pooled trusts just write your checks.

Pooled trusts do make payments on your behalf but also ensures that your spending follows Medicaid guidelines and regulations. For many, the purpose of joining a pooled trust for many is to qualify and maintain Medicaid benefits. So, it may be important to deposit funds in order to shelter this income so that you can pay other living expenses you may not otherwise be able to afford due to “spend down” requirements set forth by Medicaid.

Misconception #6: Pooled trusts are all the same.

Pooled trusts are NOT all the same. Each trust account is created and designed to fit the specific needs of the member. A professional trust company will work with you through the enrollment process and ensure your needs are met.

Misconception #7: Everyone has the same plan.

Pooled trusts do NOT employ a one-size-fits-all method. Each trust is customized to tailor each member’s unique goals for a personalized approach aligning with health and financial regulations. For example, disbursements are made according to each individual’s specific needs, and contributions made to the trust vary from one member to the next.

Misconception #8: Pooled trusts are too complex and complicated.

Although a pooled trust may seem confusing or complex, a nonprofit organization with extensive experience in these types of trust will handle all the details. They will ensure that you are following Medicaid requirements and guidelines, therefore eliminating the need for you to navigate these complicated regulations on your own.

Misconception #9: A pooled trust is expensive.

When considering the cost of any trust, it’s wise to consider the benefits that can be gained, such as valuable government benefits related to long-term home care needs. Costs associated with a pooled trust may include a one-time enrollment fee, monthly administrative fee (percentage of monthly Medicaid surplus deposit), and an annual renewal fee. These fees can vary depending on the trust provider; minimum and maximum amounts may apply.

Making informed decisions about what’s best for you or a loved one requires transparency and a clear separation of facts from fiction. Securing Medicaid eligibility through a pooled trust can ensure you or a loved one receives needed long-term home care benefits.

In such cases, it’s wise to select a professional and reputable trust organization that can do the heavy lifting for you. The Theresa Foundation Pooled Trusts are a special type of trust that allows a beneficiary to become financially eligible for public assistance benefits, such as Medicaid and Supplemental Security Income (SSI), if certain requirements are met. For more information, visit www.theresapooledtrust.org or call 1-877-391-0390.

If you would like to speak with an experienced elder law attorney regarding your situation or have questions about something you have read, please do not hesitate to contact our office at 1 (800) 680-1717. We look forward to the opportunity to work with you.