POOLED ACCOUNT TRUSTS

How do pooled account trusts work in Michigan?
A pooled account trust is a type of special needs trust administered by a nonprofit organization. Although the trust serves multiple beneficiaries, each beneficiary has a separate subaccount. Funds are pooled for investment and administrative purposes, which can provide a more cost-effective alternative to establishing and administering an individual special needs trust.

When and why consider a pooled account trust?
A pooled trust can be a helpful option when:

• An individual receives or expects to receive Medicaid or SSI and has funds, such as an inheritance, settlement, or savings, that could affect benefit eligibility.
• A family or guardian wants a professionally administered and cost-effective alternative to establishing an individual special needs trust.
• Funds are needed for supplemental or quality-of-life expenses while preserving eligibility for means-tested government benefits.

What Can a Pooled Trust Pay For?

A pooled account trust may pay for goods and services that benefit the beneficiary and supplement the assistance provided through government programs. Depending on the terms of the trust and the beneficiary’s individual circumstances, permitted expenses may include:

• Personal care items and household supplies
• Clothing and seasonal necessities
• Phone, internet, and cable services
• Transportation costs, including rideshare, bus passes, or vehicle modifications
• Medical and dental care not covered by insurance
• Therapies, counseling, and assistive services
• Adaptive equipment and mobility aids
• Education, training, and vocational programs
• Recreation, hobbies, entertainment, and travel
• Companion services and in-home support not paid for by Medicaid
• Computer equipment, electronics, and communication tools
• Certain housing and shelter expenses

All expenditures must directly benefit the beneficiary, comply with the terms of the trust, and be approved by the trustee or trust administrator. Payments are generally made directly to the provider rather than to the beneficiary. Cash payments made directly to an SSI recipient generally count as income, while payments for shelter may reduce the recipient’s monthly SSI benefit. For that reason, each request must be evaluated based on the beneficiary’s circumstances and applicable benefit rules.

How a Michigan Pooled Trust Affects Medicaid and SSI

When properly established and administered, a pooled account trust may allow an individual with a disability to preserve eligibility for certain means-tested benefits while using trust funds for supplemental needs. Important considerations include:

• Trust assets may be excluded from countable resources. Funds held in a qualifying pooled account trust generally are not counted when determining eligibility for SSI and certain Medicaid programs.
• Funding the trust requires careful timing. An inheritance, settlement, savings, or other funds may affect eligibility before being transferred to the trust. In Michigan, transfers to a pooled trust by someone age 65 or older may also be subject to Medicaid divestment rules.
• The beneficiary does not receive unrestricted access to the funds. The trust administrator reviews requests and generally pays approved expenses directly to providers.
• Distributions can affect SSI differently. Direct cash payments generally count as income, and payments for shelter may reduce the beneficiary’s monthly SSI payment. Other payments made directly to providers generally do not reduce SSI when they are not for shelter.
• The trust must be established and managed by a nonprofit association. A separate account is maintained for each beneficiary, although funds may be pooled for investment and management purposes.
• The account must be used for the beneficiary’s sole benefit. Distributions must comply with the trust documents and applicable Medicaid and SSI rules.
• Special rules apply when the beneficiary dies. Remaining funds may be retained by the nonprofit trust. To the extent funds are not retained, the trust generally must reimburse the state for Medicaid assistance provided to the beneficiary before any remaining amount can pass to other beneficiaries.