This article is a section taken from MA for People Who Are Age 65 or Older or People Who Are Blind or Have a Disability (MA-ABD), a part of the revisions and additions to the Minnesota Health Care Program Eligibility Policy Manual.
A Pooled Trust is a trust established for the sole benefit of a beneficiary who is certified disabled. The property held within a trust that meets all the requirements of a Pooled Trust is an excluded asset.
A trust must satisfy all of the following statutory requirements in order to be excluded as a Pooled Trust. If a trust does not meet all of the requirements, the trust is not an excluded asset.
The trust must be established on or after August 11, 1993.
Beneficiary Age Limit
There is no age limit for a person to establish a Pooled Trust.
A non-profit association establishes and manages Pooled Trusts. A separate account is maintained for each beneficiary of the trust but for purposes of investment and management of the trust; the funds are pooled.
The beneficiary, beneficiary’s parents or grandparents, legal guardian or a court establishes pooled trust accounts.
It must be funded with the income or assets of the beneficiary. A Pooled Trust may also contain assets of other people.
The beneficiary must meet the disability criteria of the Supplemental Security Income (SSI) program at the time the trust is established. A person with a disability established by the Social Security Administration (SSA) or State Medical Review Team (SMRT) meets this qualification.
The trust does not meet the criteria for the exclusion if the beneficiary’s disability began after the trust was established.
If SSA or SMRT did not determine the beneficiary’s disability at the time the trust was established, SMRT must determine whether the beneficiary was disabled according to SSI disability criteria at the time the trust was established.
Sole Benefit Requirement
The trust sub-account must be established for the sole benefit of the beneficiary. The trust provisions must state that disbursements from the trust must be for the sole benefit of the beneficiary at the time the trust is established and any time in the future.
Trusts that allow for payments to a spouse or dependents during the lifetime of the beneficiary do not meet this requirement even if the beneficiary does not currently have a spouse or dependent.
DHS Remainder Beneficiary
The trust must contain a provision stating that, upon the death of the beneficiary, Minnesota Department of Human Services (DHS) or “the State” receives all amounts remaining in the trust, up to an amount equal to the total amount of Medical Assistance (MA) paid on behalf of the beneficiary.
- Trust provisions allowing payment of administrative expenses and fees are acceptable if the trust also contains a provision stating that the expenses and fees must be reasonable.
- The trust is also acceptable if the trust clearly states reasonable and necessary administrative expenses may be paid only if DHS is provided with advance notice and approves such expenses.
- An additional remainder amount of up to ten percent of the value of the beneficiary’s sub-account at the time death may be retained the trustee.
Trusts that include provisions that allow for payment of the following expenses prior to repayment to the state do not qualify as a Pooled Trust:
- Payment for last illness and funeral, outstanding debts or other payments
- Payment of administrative expenses or attorney and trustee fees if the trust does not require such payment(s) to be reasonable
Evaluation of Trust Assets
Trust assets, including any income generated by the trust assets that is retained by the trust, are considered excluded assets.
Disbursements from the trust made directly to the beneficiary or to someone acting on the beneficiary’s behalf, such as a guardian or legal representative is counted as unearned income in the month received.
Payments made by the trustee for the benefit of the beneficiary, but not made directly to the beneficiary, are not counted.
- Note that for MA for Long-Term Care (MA-LTC) Services applicants and enrollees, funds entering and leaving the trusts must be evaluated to determine if an uncompensated transfer occurred. See 18.104.22.168.4 MA-LTC Other Asset Transfer Considerations for more information.
Pooled Trust Verifications
Verification of the existence of a Pooled Trust is required to determine eligibility. In addition, the trustee should provide a copy of the most recent accounting along with a copy of the trust instrument. Both documents must be sent along with a completed Special Needs/Pooled Trust Referral Form (DHS-4759) to the DHS Special Recovery Unit (SRU).
Annual Reporting by Trustees
The trustee of a Pooled Trust with a beneficiary who is an applicant or recipient for MA is required by state law to submit an annual trust accounting directly to SRU. The beneficiary is not required to provide this information as part of the renewal process.
If the person or person’s authorized representative or trustee provides this information to the county, that information must be forwarded to SRU.
Minnesota Statutes, section 256B.056, subdivision 3b
Minnesota Statutes, section 501C.1205, subdivisions 3 and 4
United States Code, title 42, section 1396p(d)
CREDIT: The content of this post has been copied or adopted from the Minnesota Healthcare Programs Eligibility Policy Manual, originally published by the Minnesota Department of Human Services.
This is also part of a series of posts on Minnesota Healthcare Eligibility Policies.