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CA Special Needs Trust Planning - Pooled Trusts for Simple Low Cost Administration

Pooled Trusts

Pooled trusts are the statutory solution designed to help disabled individuals who are receiving a lump sum of money and cannot affordably establish a First Party Special or Supplemental Needs Trust. This regularly happens when an injury settlement is reached without a lawsuit having been filed and the injured person no longer has a surviving parent or grandparent. Pooled trusts are also very advantageous for individuals receiving funds which are less than the amount to cover the costs of establishing and maintaining a First Party Special Needs Trust. Finally, multi-party special needs trusts are useful for families who wish to provide for a loved one and are unable to find an acceptable trustee or unable to afford to pay a professional trustee.

Pooled Trust are established by non-profit organizations. Each Pooled Trust has its own rules. Under a pooled trust arrangement individual accounts are set up for each beneficiary who have 'joined' the trust. Each beneficiary receives special needs distributions from their own 'fund'. Investments for the various funds are usually pooled giving the beneficiary's greater access to more sophisticated and stable investment management then would have been available to most first or third party trusts.

Although all of a beneficiary's 'fund' within a Pooled Trust can be used for that beneficiary's supplemental needs some pooled trusts limit fund investments avoiding holding assets like a home for the use of a beneficiary. For this reason it is important to compare pooled trust programs to find the best fit for a particular beneficiary's circumstances.

Marketing Materials for pooled trusts are notoriously shallow in the amount of important information provided. Before 'joining' a pooled trust be certain to personally review and have professionally reviewed the trust's joinder and program agreement.

Attorney Joel Weissler has over twenty-two years of experience in helping families prepare for and deal with life cycle events. He can be reached in his San Diego, California office at (619) 281-1888

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