Frequently Asked Questions

 

What is the OBRA ’93?

Congress in 1993 decided to allow disabled individuals to retain the benefit of assets they own and still get Medicaid if the assets were put into one of two kinds of special needs trusts with payback provisions. In 1999, Congress added allowing all SSI beneficiaries to use such trusts.

 

What is a “Special Needs Trust”?

Special needs trusts – sometimes called “d-four-a” trusts for the statute where their use is set out – maintain and administer assets for the recipient of SSI or Medicaid without jeopardizing their eligibility for those public benefits. The trustee must have “full discretion as to the time, purpose and amount of distributions,” and the funds may be used for any good or service for the benefit of the beneficiary. However, the beneficiary has no right to demand any specific or particular payment. Any disabled person under age 65 can have his or her assets put into such a trust.

 

What is “payback”?

The price Congress asked for allowing people with assets to get SSI or Medicaid is that, upon the person’s passing, Medicaid programs are repaid out of the special needs trust for all benefits paid by Medicaid.

 

What is a Pooled Special Needs Trust?

A Pooled Special Needs Trust, also called a “d-four-c” trust, is a group Special Needs Trust. The specific requirements are that:

Ø The trust is established and managed by a nonprofit organization (501)(c)(3).

Ø It maintains separate accounts for each beneficiary but pools funds for investment and management.

Ø The individual accounts are established solely for the benefit of the disabled individual by the individual or his or her parent, grand­parent, or legal guardian or by a court.

Ø Payback to Medicaid is required except for funds retained by the trust for the benefit of other disabled individuals.

 

I noticed there is no mention of age in the pooled special needs trust.  Can my elderly mother (age 76) enroll in and benefit from the Pooled Trust?

Yes, but transfers to a pooled trust account by people over the age of 65 may be subject to a period of ineligibility for Medicaid coverage for long term (nursing home) care and related services.  You should contact an attorney or your state’s Medicaid office for more information on the rules relating to these periods of ineligibility.

 

Can the Trust pay the expenses of a family member to accompany a beneficiary on a vacation, if an attendant is needed?

Yes, if it is in the best interest of the beneficiary and there is enough money in the account.

 

When are you required to seek permission from a court to establish a Pooled Special Needs Trust account for someone with his or her money?

Ø if the individual is not competent

Ø if there is no agent (under a power of attorney) with authority to establish a trust account

Ø if the individual is under 18 years of age

 

I understand there is a minimum amount of $5,000 to establish the account, but is there a maximum?

No, there is no maximum on how much you can put into a Pooled Special Needs Trust. 

 

Can you add funds to an established individual account?

Yes, you can add funds to an individual account and there are no limitations on the amount. Funds added after the beneficiary turns 65 may subject him or her to ineligibility for nursing home benefits as noted above.

 

Can the Trustee write checks to the beneficiary?

Yes, but only up to $20 dollars per month.  After that, the Trustee can only write checks to a beneficiary when reimbursing for expenses already paid.