A Pooled Income Trust May Be The Best Option For Those With Excess Income

For an individual to be eligible for Medicaid services at home, he or she must be over 65 and disabled. In addition, the applicant must meet certain income and asset criteria in order to qualify, because Medicaid eligibility requires a means based test. As of 2017, an applicant is allowed to have $845.00 in income. It is possible that Medicaid may take any income in excess of this amount. For many individuals, turning over these excess funds to Medicaid is not a viable option because it would leave them without the means to pay certain expenses. Continue reading “A Pooled Income Trust May Be The Best Option For Those With Excess Income”

Which Trust Helps Me Qualify for Medicaid?

Through conscious Medicaid planning, New York residents may be able to preserve some of their assets for their children or other heirs while still meeting Medicaid’s income requirements. One means of achieving this is through the establishment of a trust. By placing assets into certain types of trusts an individual can eliminate their countable assets for Medicaid eligibility purposes. However, only certain trusts may be useful in qualifying for Medicaid. Continue reading “Which Trust Helps Me Qualify for Medicaid?”

Common Long-Term Care Planning Misconceptions

Many people share common concerns as they reach retirement age: Will they have the ability to remain independent in their homes without intervention from others? Are they going to be able to maintain good health and receive adequate health care? Will they have enough money for everyday needs and not outlive their assets and income? Despite the fact that thousands of Americans are concerned with these aspects of aging, many have failed to develop adequate long-term care plans that specify which services they will need and how they will pay for them. Unfortunately, many Americans also share common misconceptions about long-term care planning that may be factors in why individuals fail to establish a properly executed long-term care plan prior to when they need the services. Continue reading “Common Long-Term Care Planning Misconceptions”

Pooled Trusts Help You Protect Your Disabled Loved Ones

A trust is a way to distribute assets to a beneficiary where a trustee, or the person in control of the working trust, is assigned.  There are different types of trusts that are set up for specific purposes.  One type of trust is a special needs trust, which is created for beneficiaries with disabilities.  Under a special needs trust, there is what is known as a pooled trust, also called community or master trusts.

A pooled trust is where the trust assets of multiple individuals are combined, and then distributed proportionately.  Some pooled trusts are created in order to care for the disabled beneficiaries, and others are set up just to manage money properly.  Typically, these trusts are run by a nonprofit organization, and no two are identical.  When setting up a pooled trust, an individual contract is written to reflect individual circumstances.

When it comes to Medicaid, a pooled trust is a way to enable an individual to qualify while still being able to use their income to pay bills. Typically, to qualify for Medicaid, and individual must “spend down” their income to $825.00 for singles and $1,210.00 for couples, after a $20 income disregard. Any money above these amounts must be paid back to Medicaid, or to other medical bills. The issue with this in New York is that the cost of living is so high, individuals are unable to pay basic bills, such as rent and electric, on the Medicaid allowed spend down amount. This is the reason why many people are unable to afford to go on Medicaid, or why they do not qualify.

With this in mind, pooled trusts offer a solution. A qualifying disabled individual can participate in a pooled trust by depositing the amount of their spend down/overage amount. This can then be used to pay necessary bills, allowing the individuals to use all of their money in some fashion. There is an initial fee of $300.00, and a monthly banking and yearly fee, but all-in-all, a pooled trust can allow for Medicaid coverage without a spend down.

There are some other advantages in choosing a pooled trust.  One, a trustee is not named as in a regular trust.  There are directors of the trust who likely have experience in the area, but not a specific trustee.  Sometimes it is difficult for family members to choose a trustee, and this alleviates the pressure of having to do that.  Another advantage is that a pooled trust does not require individuals to have a large amount of money as regular trusts require.  Lastly, with a pooled trust, the organization is well versed on agency law and how social security insurance and Medicaid programs work.  This knowledge can help the beneficiary fully understand how the programs and the trust intertwine.

There are some disadvantages to a pooled trust as well.  A few of the basic drawbacks include the inflexibility of the pooled trust, infrequent distribution of funds, and limitations on the types of investments it allows.  However, these issues are generally specific to the pooled trust in which you choose to participate.

Understanding the advantages and disadvantages thoroughly and consulting with an experienced advisor is essential to ensuring access to care while protecting your assets.  P&P Medicaid Consulting, Inc. has been helping clients structure pooled trusts so that there is a reduction in monthly income overages.  P&P Medicaid provides Medicaid application services. The company also provides a full range of geriatric care management services to help individuals and their families make decisions about and supervise their long-term care needs.  Please contact P&P Medicaid Consulting, Inc. at (516) 541-4770 for more information.