When To Use Pooled Special Needs Trusts

A pooled SNT is a special type of SNT that is created by a nonprofit organization. The nonprofit organization may act as the trustee of the pooled SNT, or it may select the trustee. Individuals have separate accounts in the pooled SNT, but all the money is pooled together and invested by the trustee. Individual beneficiaries get the services of a professional trustee and more investment options because there is more money overall. A third-party pooled trust provides a way to benefit from a special needs trust without having to create one yourself. Just as with single-beneficiary trusts discussed above, there are both “third-party" pooled SNTs (which you can use to give money during life, or leave money upon death, for a special needs beneficiary) and “first-party" pooled SNTs – also called “(d)(4)(C)" trusts – used to protect money that belongs to the special needs beneficiary. Unlike the individual payback trust – i.e., the (d)(4)(A) discussed above, which must be established by the disabled person's parent, grandparent, legal guardian, or by a court, a pooled SNTs may also be created directly by the beneficiary. In addition, at the beneficiary's death the state does not have to be repaid for Medicaid expenses so long as the funds are retained in the trust for the benefit of other disabled beneficiaries.