Pooled Trust Update:

On Behalf of | Aug 8, 2023 | Estate Planning, Trusts |

Last March 2023 we described the efforts of Senator Jehlen and Representative Hogan (H1274/5773) to sponsor a bill in the Commonwealth legislature that would enable seniors to use special needs pooled trusts without penalty to pay for important services and care not covered by MassHealth.

Although the law didn’t pass (former Governor Baker ultimately rejected this attempt) a new deadline for individuals 65 and over to utilize the special Needs Pooled Trust to preserve assets, is now extended from the June 1, 2023 deadline to March 1, 2024.

It is hoped that Governor Healey will support new legislation that enables seniors 65+ to continue utilize pooled trusts to preserve some assets.

What is important to understand is that this method to preserve assets is still valid until March 1, 2024.

Here’s how it works:

A “pooled trust” is 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.

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.

The Omnibus Budget Reconciliation Act of 1993 allows disabled individuals of any age to transfer assets to pooled trusts. In June 1919 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.

Pooled trusts already created before March 1, 2024 remain a valid method for seniors to preserve assets. It is hoped that our current Governor will ratify a new law enabling seniors to continue to utilize these trusts.

If you think you might want to consider or need this type of trust feel free to call the office  617-431-2669 to set up a meeting to discuss this option.