When creating and administering a special needs trust, it can be hard to find a suitable trustee that is skilled in investments and the ongoing administration of the trust. A pooled special needs trust, also known as a (d)(4)(C) SNT, is established and operated by a nonprofit association that typically has record for how it administers assets for individuals with disabilities.
The pooled special needs trust maintains a separate account for each beneficiary of the trust. A beneficiary’s parent, grandparent, guardian, or individual with the disability must first set up the account. An initial enrollment fee and annual maintenance fee vary depending on the trust provider. The pooled trust achieves the same objectives as an individual special needs trust – to maintain the beneficiary’s government benefits such as Supplemental Security Income or Medicaid while using the trust monies to supplement government benefits.
A pooled SNT also allows the trust to be created with any amount of money, whereas professional trustees will only accept an individual special needs trust when the account begins with $500,000, for example. A pooled SNT account can be funded through a will, life insurance policy, and third party as well.
When the beneficiary passes away, the remainder of the account balance can be subject to retention guidelines. This can mean the remainder goes to the charity, to the state Medicaid agency, or some combination of the two. When donors want the remainder to go to family members, they must establish a companion SNT beforehand to leave the trust balance to family members and avoid the requirements.
As SNTs are complex and the best option for each individual with disabilities varies, it is advised to consult an experienced asset protection and special needs planning attorney. Littman Krooks LLP counsels individuals and families on SNT issues, government benefits and services, and asset protection. To learn more about New York asset protection or New York special needs planning, visit http://www.littmankrooks.com.