How to Save Assets and Qualify for Medicaid

In Massachusetts, pooled trusts help

By Doug Mentes, Esq. | Last updated on January 19, 2023

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Medicaid is the federal program that helps seniors pay the costs of nursing home care, or in-home care. The Medicaid program in Massachusetts is administered by MassHealth. To obtain coverage for nursing home costs and other senior care under MassHealth, individuals must meet eligibility requirements and have no more than $2,000 in assets. Once covered, however, the recipient’s care is almost fully paid for. And with annual costs for nursing home care in Massachusetts averaging $140,000, you’ll want to have Medicaid eligibility. Seniors with savings in excess of the asset limit and income limit are left with limited choices when trying to obtain Medicaid coverage: They can pay, or spend down, all of their savings toward the cost of care until their savings are exhausted, or find an acceptable way to shelter at least a portion of those savings. The only method available to seniors in Massachusetts is through a pooled trust. Only nonprofit organizations regulated by the state may offer pooled trusts, and there are only a few of these in Massachusetts.

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
  • Clothes
  • Transportation
  • Even take a vacation
Klyman believes the pooled trust, an irrevocable trust, really makes a difference in people’s lifestyles, and she laments that applicants otherwise “could spend all their money on the nursing home and still get Medicaid, but their quality of life is so much less.” A pooled trust is “a way to maintain some semblance of a quality of life—a way to improve the life of someone in a nursing home who may not have anything else or anybody else to care for them or look in on them,” she adds.

Massachusetts Can Recover Its Costs From Pooled Trusts

The 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 Charities

The 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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