FAQ - Pooled Account Trusts

Patricia E. Kefalas Dudek

Advocate for Elders, People
with Disabilities
and Their Families

Frequently Asked Questions - Pooled Account Trusts

We are teachers and advocates, and as a part of that process we frequently answer questions from our clients -- so we started collecting our Frequently Asked Questions. We are collecting and sharing them with you by topic and hope these are helpful to you.

Please feel free to email Patti at pdudek@pekdadvocacy.com if you have a follow up question or comment. We'd also like you to let us know what you think of this new feature of our website.

KEEP IN MIND THESE ARE GENERAL QUESTIONS AND CANNOT BE CONSIDERED LEGAL ADVICE OR THE BEGINNING OF THE ATTORNEY-CLIENT RELATIONSHIP.

We have redacted names to protect the innocent! Sometimes they are posed in a give and take format because they were developed through an email exchange.

(Note: questions are not edited for spelling, grammar or content.)

FAQ links: • Index • Aging • Disabilities • Estate Planning • Financial • Medicaid • Misc. • Pooled Account Trusts • Real Estate • Public Benefits
• Special Education • Special Needs Trusts

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Payment of Unused Funds:

Question: I am curious if any of the pooled trusts that Patricia counsels allow for payment of any unused funds (on the death of a beneficiary) to the nonprofit organization that referred the beneficiary to the trust?

Answer: Sort of - this is how it works: the remainder must be retained in trust to assist others with disabilities. In the joinder the person can give priority to specific individuals; any individual that is a family member that has a disability, and a person or people with disabilities receiving services from a particular non-profit (then the trustee calls and works it out with the non-profit. Payment cannot be made directly to the non-profit unless it is specifically for a person with a disability.)

Question: I am also curious whether a pooled trust would benefit a person that is asset eligible for Medicaid, but currently not income eligible.

Answer: Why are they are not income eligible? Can they spend down income? Or depending on the source of income, it can be assigned to the trust.

Credit Cards:

The following are questions from one of our PAT clients with the names removed for privacy:

Question: I have some questions about how to access the money in X's trust fund. I checked with the bank about getting a credit card in X's name and it is not an option. I have a credit card I do not carry a balance on that is in my name - should I use this card for the things that X needs?

Answer: Yes.

Further Question: If so, do I send you the entire credit card statement every month for the trust to pay directly to the bank or do I turn in individual receipts and have the trust write me a check to pay the credit card off every month?

Answer: Either way, or you can have the bills sent to her directly and then you only need to send us the receipts.

Further Question: Would it be better to open a new credit card account in my name and list X as an authorized user? I would always be with X when the card was used because she is not capable of discerning what she can and cannot buy.

Answer: You could do that, but it is cleaner not to, so I advise against it. You can get a new card that you and your family use only for her, that comes here directly. We have lots of families that do that. Also keep in mind that we can use a credit card that we have here that acts as a debit card if you need that in a pinch.

Patricia E. Kefalas Dudek

IRA Issues:

Question: I am a 63 year old Medicaid beneficiary. I have an IRA worth about $70,000 that I inadvertently overlooked in the Medicaid application process. Would you be able to help me re-title the IRA so I can maintain my benefit? I have been receiving Medicaid for years. What can I do?

Answer: A Pooled Trust Account (PAT) may be the right fit for this individual in order to preserve as much of the IRA as possible. She will likely have to cash in the IRA and pay the tax to protect it. Before this can happen it must be brought to Medicaid's attention through an Irrevocable Assignment to the PAT. Please see my page on Estate Planning - Pooled Account Trusts for more information.
Patricia E. Kefalas Dudek

For further information, see Letter from State of Maryland Office of Attorney General, Dept. of Health and Mental Hygiene (4/23/10). This letter clarifies the issue of permissibility of a disabled beneficiary 65 years of age and older transferring assets from his or her special needs trust into a pooled trust without penalty.

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