pooled income

Beneficiaries who receive benefits from programs like Medicaid or Supplemental Security Income (SSI) may be at risk of losing those benefits if they receive money from an accident settlement or inherit money. This is because their income may exceed the thresholds set by these government programs. However, there are ways that individuals can protect these benefits in these situations by using a pooled income trust.

What is a Pooled Income Trust?

A pooled income trust is a type of trust set up and managed by a non-profit organization. Each beneficiary has a separate account within the trust, but the funds are pooled for investment and management purposes. This trust is designed to safeguard the income of a person with disabilities while still enabling them to receive government benefits like Medicaid. The income put into a pooled trust can also be utilized to cover additional needs that are not covered by public assistance, including:

  • Housing expenses such as real estate, taxes, utilities, and rent
  • Living costs including shelter, food, and clothing
  • Private pay care services
  • Additional nursing care
  • Medical treatment and other care not offered by government assistance
  • Travel costs
  • Attorney fees and guardian expenses

What Costs and Other Expenses Can Not Be Paid With a Pooled Income Trust?

While a pooled income trust can help individuals cover a variety of needs, there are certain items that cannot be paid by this trust, including:

  • Gifts for other individuals
  • Alcohol, firearms, or tobacco products 
  • Purchases that are not for the sole benefit of the beneficiary
  • Invoices, receipts, and bills that are not in the beneficiary’s name
  • Rent or mortgage payments after a beneficiary has been in a nursing home for a certain period of time

However, to better understand what expenses are and are not covered by a pooled income trust, consider discussing the issue with an experienced elder law attorney. These legal professionals can provide guidance regarding your options when it comes to these trusts and what they can mean for your family.  

The Benefits of a Pooled Income Trust? 

The current Federal Law indicates that any income received by a Medicaid recipient or from an ordinary trust will be considered part of the recipient’s assets. This money must be used up before Medicaid will cover the remaining cost of home care. As a result, many seniors receiving Medicaid for home care services may not be able to afford to continue living at home because all of their income is being used to pay for home care services.

However, when an individual has a pooled income trust, they can keep a certain amount of income directly, and the extra monthly income can be put into a pooled income trust. This pooled income can then be used for living expenses and other home care costs. Consequently, a pooled income trust can ultimately protect a person’s income and allow them to still receive public benefits. 

Learn More About Pooled Income Trusts, Contact Losavio & DeJean Today 

Losavio & DeJean, LLC is an elder law and special needs planning firm that serves seniors, their families, and individuals with disabilities. Known as The Louisiana Elder Law Firm, we provide comprehensive counsel based on our extensive experience, education, and certifications. More importantly, our legal services cover various areas of practice, including Medicaid planning, estate planning, and retirement tax planning.

If you are looking for further information about pooled income trusts or what is involved in setting one up for your loved one, contact Losavio & DeJean, LLC, today. Our legal team can review your options for the future and explain how we can help you.