Posted by: Joanne Marcus, MSW on Feb 4, 2019

When is a Pooled Trust the Right Choice for Your Client?
By Joanne Marcus, MSW


When handling the proceeds from a workers’ compensation settlement, a first-party pooled special needs trust (PSNT) can be the right choice.  A first-party PSNT is established with the beneficiary’s own funds and is a cost-effective way to protect eligibility for means-tested government benefits, Medicaid and Supplemental Security Income (SSI).  A PSNT can provide professional assistance to manage funds even in the absence of public benefits.  Some first-party PSNTs can have a Medicare Set-Aside account nested inside. 

A PSNT is administered by a nonprofit organization.  Funds are pooled together for investment purposes to reduce administrative fees and increase the principal for investment. 

The following checklist will help you identify when a PSNT is the right choice for your client.

oDoes my client have a disability?

In order to have a PSNT, the beneficiary must have a disability.  The definition of a disability published by the Social Security Administration (SSA) can be a guideline or a well-documented history of the nature of the disability may be accepted.  The SSA definition for adults 18 and older states that an individual must be unable to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death, or which has lasted or can be expected to last for a continuous period of not less than 12 months. 

oDoes my client receive Medicaid?

Medicaid, a federal health insurance program administered by the states, is a means-tested benefit for individuals with disabilities who are impoverished.  Adults are eligible for Medicaid if they have a disability, have no more than $2,000 in countable resources (a Medicare Set-Aside is a countable resource-see below) and are below the federal poverty income level ($12,140 for an individual in 2019).

oDoes my client receive SSI?

SSI is a federally funded, means-tested public benefit with similar eligibility requirements as Medicaid.  SSI is a monthly monetary allowance that is intended to pay for food and shelter ($771 in 2019).

oDoes my client require a MSA?

A Medicare Set-Aside (MSA) is considered a countable asset when calculating eligibility for Medicaid and SSI.  The coordinated use of an MSA nested within a PSNT can solve the eligibility issue.

o Will my client need a trust administrator to manage their funds?

Due to the nature of an injury or disability, a client may need professional assistance to manage their funds even in the absence of public benefits.

If you can answer “YES” to any of these questions, a PSNT offers a solution for handling your client’s post-settlement funds.


About the author:  Joanne Marcus, MSW, is the Executive Director of Commonwealth Community Trust, a nonprofit organization and WILG Affinity Partner, that provides administration of pooled special needs trust nationwide. 


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