NAELA Nuggets

On Behalf of | Mar 30, 2023 | Estate Planning, Long Term Care Planning, Medicare and Medicaid, Trusts |

As many of my readers and clients know, continuing legal education and keeping up-to-date on legal change is important to me and more specially to my clients who benefit by it. I regularly attend meetings of the Massachusetts branch of the National Academy of Elder Law Attorneys; and also attend meetings for Wealth Counsel, an estate planning organization, to keep up. My office carried on what I call “the CLE initiative” throughout the Pandemic by zoom meetings and reading various professional publications; and this effort continues to date. Changes in the law and revision of our approaches towards legal issues, drafting appropriate documents, and advocacy for clients within the various systems of law are the driving forces behind my legal education initiative. Included in that initiative is having my paralegal Jennifer Duhaime-Baker also keep up with what she wants and needs to know. She and I speak just about every day about issues that come up with respect to the law and practice in the context of clients’ issues. This way, we are both “on the same page!” The end result: better service and a constantly improving product for our clients.

Last week I attended an update at NAELA.  Here one “nugget” from that up-date as it related to pooled trusts. My office has been utilizing pooled trusts for as long as I can remember, and I have been watching developments in this area of law for what appears to be forever! So here are some points:

  1. For background: A pooled trust isa type of trust that’s opened and administered by a nonprofit organization to protect the assets of people with disabilities. Clients are assisted by their attorney in the creation and registration of these trusts through the nonprofit organizations. 
  2. Why bother with a pooled trust? A MassHealth recipient may only have assets below $2,000. The use of the pooled trust for assets in excess of the $2,000, provides a source of funds to pay for items and services not covered by MassHealth without disqualification (until now) for transfers into this type of trust. For Example: funds from a pooled trust may be used for home care services, uncovered medical, dental and pharmacy costs, transportation, clothing, personal needs and household items, nonmedical therapies and assisted living expenses.
  3. The Omnibus Budget Reconciliation Act of l993 allows disabled individuals of any age to transfer assets to pooled trusts. In June l919 a federal court decision held that a Medicaid penalty may be imposed, if a senior (age 65+) creates a pooled trust account. But there is no penalty if fair market value is received in exchange for the transfer. MassHealth allowed transfers to pooled trusts (without penalty) for two decades under the current federal statute. Now MassHealth would like to impose a penalty for the creation of such trusts effective 6/1 of this year.
  4. Pooled trusts already created before this date are not affected by this MassHealth ruling.
  5. Senator Jehlen and Representative Hogan (H1274/5773) are sponsoring a bill to enable seniors to use special needs pooled trusts without penalty to pay for important services and care not covered by MassHealth.

It is hoped that this law will pass. But there is still time to draft these trusts if they are completed prior to June 1, 2023. If you think you might be interested in or need this type of trust feel free to call the office to set up a meeting to discuss this option.