How to Save Assets and Qualify for Medicaid
In Massachusetts, pooled trusts helpBy Doug Mentes, Esq. | Last updated on January 19, 2023
Use these links to jump to different sections:
- What Is a Pooled Trust?
- Massachusetts Can Recover Its Costs From Pooled Trusts
- Benefit To Nonprofit Charities
What Is a Pooled Trust?Carol Cioe Klyman is an elder law attorney in Springfield. She has more than 20 years of experience in helping seniors plan for Medicaid, and often advises clients on pooled trusts, exempt assets and estate recovery. “The nonprofit takes each individual’s trust funds, a lump sum, and invests those funds the exact same way, so I have my separate account but the nonprofit invests everybody’s money the exact same way,” she says. “That is why they call it a pooled trust: It’s invested as a pool.” The recipient can use the trust funds to supplement Medicaid coverage and pay for items or services not covered by Medicaid, including:
- Specialized, medical equipment
- Enhanced care or services
- Companion services
- Even take a vacation
Massachusetts Can Recover Its Costs From Pooled TrustsThe transfer of funds into the trust is not subject to the Medicaid rule requiring a period of ineligibility, or look-back period for transfers within a five year look-back period of application, because there is a “payback” provision in the health care laws. This means MassHealth can recover some or all of its covered costs when the recipient passes away. Klyman cautions that pooled trusts won’t protect inheritance for the recipient’s family, however. “In the vast majority of these trusts, nothing is going to the family. There’s nothing left over,” she says. “I think I’ve had one case in 20 years where there was something left in a trust for the family and it was because the recipient died very soon after funding the trust.”
Benefit To Nonprofit CharitiesThe nonprofit organizations that provide pooled trusts also provide other benefits to seniors and disabled citizens. A portion of the funds—typically between 10 percent and 20 percent—that remain when the Medicaid recipient passes away are paid to the nonprofit. Klyman explains that the pooled trusts are a way to keep these charities going, adding that these nonprofits “benefit a lot of disabled people, and a lot of the nonprofit’s clientele are disabled people who don’t have trusts or savings.” Pooled trusts appear simple and often may not require an attorney’s assistance. However, it never hurts to consult an experienced Massachusetts elder law attorney for legal advice about Medicaid planning and to determine all the asset protection options available to the Medicaid applicant prior to moving forward with their estate planning. For more information on this area, see our overview of elder law and estate planning.
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