1	Pooled Special Needs Trusts What Does Social Security Say
2	About these Materials These materials are from the Social Security Program Operations Manual which is is their interpretation of the law as it pertains to Pooled Trusts The POMS site to these materials is “SI 01120.203 Exceptions to Counting Trusts Established on or after 1/1/00” which can be found at http://policy.ssa.gov/poms.nsf/lnx/B3
3	A pooled trust is a trust established and administered by an organization. It is sometimes called a “master trust” because it contains the assets of many different individuals, each in separate accounts established by individuals, and each with a beneficiary. By analogy, the pooled trust is like a bank that holds the assets of individual accountholders.
4	The provisions of the SSI trust statute do not apply to a trust containing the assets of a disabled individual which meets the following conditions: The pooled trust is established and maintained by a nonprofit association;
5	The provisions of the SSI trust statute do not apply to a trust containing the assets of a disabled individual which meets the following conditions: Separate accounts are maintained for each beneficiary, but assets are pooled for investing and management purposes;
6	The provisions of the SSI trust statute do not apply to a trust containing the assets of a disabled individual which meets the following conditions: Accounts are established solely for the benefit of the disabled individual;
7	The provisions of the SSI trust statute do not apply to a trust containing the assets of a disabled individual which meets the following conditions: The trust provides that to the extent any amounts remaining in the beneficiary's account upon the death of the beneficiary are not retained by the trust, the trust will pay to the State the amount remaining up to an amount equal to the total amount of medical assistance paid on behalf of the beneficiary under a State Medicaid plan.
8	The provisions of the SSI trust statute do not apply to a trust containing the assets of a disabled individual which meets the following conditions: NOTE: There is no age restriction under this exception.
9	Disabled Under the pooled trust exception, the individual whose assets were used to establish the trust account must meet the definition of disabled for purposes of the SSI program.
10	Nonprofit Association The pooled trust must be established by a nonprofit association. For purposes of the pooled trust exception, a nonprofit association is an organization defined in section 501(c) of the Internal Revenue Code (IRC) and that also has tax-exempt status under section 501(a) of the IRC. (See SI 01120.203F. for development.)
11	Separate Account A separate account within the trust must be maintained for each beneficiary of the pooled trust, but for purposes of investment and management of funds, the trust may pool the funds in the individual accounts. The trust must be able to provide an individual accounting for the individual.
12	Established for the Sole Benefit of the Individual Under the pooled trust exception, the individual trust account must be established for the sole benefit of the disabled individual. (See SI 01120.201F.2. for a definition of sole benefit.) If the account provides a benefit to any other individual, this exception does not apply.
13	Who Established the Trust Account In order to qualify for the pooled trust exception, the trust account must have been established by the disabled individual himself/herself or by the disabled individual's: parent(s); grandparent(s); legal guardian(s); or a court.
14	Who Established the Trust Account A third party establishing the trust account on behalf of the individual must have legal authority to act with regard to the assets of the individual.
15	Who Established the Trust Account An attempt to establish a trust account by a third party without the legal right or authority to act with respect to the assets of the individual may result in an invalid trust.
16	Who Established the Trust Account This requirement refers to the individual who physically took action to establish the trust even though the trust was established with the assets of the SSI claimant/recipient.
17	State Medicaid Reimbursement Provision To qualify for the pooled trust exception, the trust must contain specific language that provides that, to the extent that amounts remaining in the individual's account upon the death of the individual are not retained by the trust, the trust pays to the State from such remaining amounts in the account an amount equal to the total amount of medical assistance paid on behalf of the individual under the State Medicaid plan.
18	State Medicaid Reimbursement Provision To the extent that the trust does not retain the funds in the account, the State must be listed as the first payee and have priority over payment of other debts and administrative expenses except as listed in SI 01120.203B.3.a.
19	Allowable and Prohibited Expenses The following types of administrative expenses may be paid from the trust prior to reimbursement of medical assistance to the State: Taxes due from the trust to the State or Federal government because of the death of the beneficiary; Reasonable fees for administration of the trust estate such as an accounting of the trust to a court, completion and filing of documents, or other required actions associated with termination and wrapping up of the trust.
20	Prohibited Expenses and Payments The following expenses and payments are examples of some of the types not permitted prior to reimbursement of the State for medical assistance: Payment of debts owed to third parties; Funeral expenses; and Payments to residual beneficiaries.
21	Applicability This restriction on payments from the trust applies upon the death of the beneficiary. Payments of fees and administrative expenses during the life of the beneficiary are allowable as permitted by the trust document and are not affected by the State Medicaid reimbursement requirement.
22	Pooled Special Needs Trusts The Attorneys’ Role in the Enrolment Process
23	Introduction The North Bay Housing Coalition (NBHC)is dedicated to life long advocacy for all persons with disabilities The board of the NBHC wants to make certain that all enrollee’s in the NBHC Special Needs Trust have been properly counseled regarding all options available to the beneficiary, and the advisability of joining the trust.
24	Introduction Keep in mind that the NBHC Special Needs Trust is an irrevocable trust, and by state and federal law, beneficiaries of the trust have a loss of control over assets in the trust.
25	The Enrollment Process When a potential beneficiary seeks to join the NBHC Special Needs Trust they are sent a joinder agreement to join the trust. The bylaws of the NBHC Special Needs Trust requires all potential beneficiaries to receive independent counsel from a trained attorney that will provide counseling on the advisability of joining the trust and the alternatives to joining the trust.
26	The Enrollment Process In addition, it is the independent counsel’s duty to determine whether the beneficiary has the competency and authority to transfer property to the NBHC Special Needs Trust
27	The Foster Care Independence Act of 1999 Prior to 12/14/99, an individual on SSI could give away their assets for less than fair market value without penalty
28	The Foster Care Independence Act of 1999 On 12/14/99, the President signed into law the Foster Care Independence Act of 1999 (P.L. 106-169). Section 206 of this law provides for a period of ineligibility for SSI up to 36 months for an individual who transfers a resource for less than fair market value.
29	Options to Maintain Eligibility Therefore, when an SSI recipient receives an inheritance or personal injury award, their options to continue eligibility are Pay off debt Buy exempt resources Prepay services Make certain transfers allowed by law Transfer into a (d)(4)(a) or (d)(4)(c) Special Needs Trust Blow the money
30	BASICS OF SSI ELIGIBILITY Exempt Resources A home, if the beneficiary has an ownership interest and it serves as his/her principal residence.
31	Payment of Debt It is very common that persons involved in a personal injury settlement have had assistance from family members and friends in the form of free rent or loans until the award is received. SSA will assume that the family made a gift unless the loan is evidenced by a written note.
32	BASICS OF SSI ELIGIBILITY Exempt Resources Household goods all together worth no more than $2,000 market value furniture, furnishings, household equipment, personal effects such as clothing, jewelry, items of personal care and education, musical instruments
33	BASICS OF SSI ELIGIBILITY Exempt Resources One automobile to the extent current market value does not exceed $4,500, unless modified for operation by or transportation of a handicapped person (such as a wheelchair van), or necessary for employment, medical treatment, or is necessary to perform essential daily activities.
34	BASICS OF SSI ELIGIBILITY Exempt Resources Items related to the disability
35	BASICS OF SSI ELIGIBILITY Exempt Resources Life insurance policies with cash surrender value, if their total face values amount to less than $1,500, and All term life insurance. A burial plot, or other burial space, worth any amount. Up to $1,500 set aside for burial expenses
36	Compensation Received In The Form Of ISM SSA values compensation received in the form of ISM at its full CMV (monthly or annually depending upon the agreement) multiplied by the length of time for which it is to be provided under the agreement. The value of the compensation is not capped at the value of the one-third reduction (VTR) or presumed maximum value (PMV).
37	Compensation Received In The Form Of ISM Example: Mr. Thomas transfers $30,000 cash to his sister based on a written contract that she would provide him with food and shelter for 5 years. The sister values the food and shelter at $500 per month. The CR develops Mr. Thomas' living arrangements and determines that he has a flat fee arrangement with his sister and is required to pay $500 per month. The food and shelter for 5 years is worth $30,000 (5 years x $6,000 per year). Therefore, Mr. Thomas received FMV for the $30,000 he transferred. ISM is not counted because the Mr. Thomas has prepaid for his food and shelter with the $30,000 he transferred (SI 00835.480D.).
38	Compensation Received In The Form Of ISM NOTE: Using the same facts as in the preceding example, assume that the CR is conducting a redetermination 2 years later and the sister providing the ISM alleges that the value of the food and shelter she provides has increased to $650 per month. Since Mr. Thomas entered into an agreement that the $30,000 covered his food and shelter for 5 years, do not re-open the LA/ISM determination due to breakpoints that may occur in that household such as an increased flat fee charge. Assume that the individual is not getting ISM for the duration of the 5 years unless the individual moves from that household to a new residence.
39	How SSA Determines Value of Services SSA determines the value of services provided to the transferor based on the CMV of the services (monthly or annually) and their frequency and duration under the agreement. Example: In exchange for $9,000 cash, the individual contracts for yard maintenance services for 5 years. The maintenance company charges $150 per month ($1,800 per year). Five years of maintenance at $1,800 per year equals $9,000.
40	Assumption of a Legal Debt SSA values compensation in the form of assumption of the transferor's legal debt at the outstanding principal amount. Interest payments are not compensation. Example: The individual had ownership interest in a piece of real property with a current market value of $12,000. The individual had equity of $2,000 and owed $10,000. The individual alleges that he could not keep up the payments and transferred title to the property to his brother in exchange for his brother assuming responsibility for the real estate contract. The value of the compensation received is $10,000 which is the amount of the outstanding debt. The uncompensated value is $2,000—the difference between the CMV and the outstanding debt. (See SI 01150.005D.5.)
41	ISM for Life If the SSI recipient creates as agreement is that the receiver of the property will provide ISM for the life of the eligible individual, use the table in SI 01150.005F. to determine the total value. Multiply the yearly CMV of the ISM being provided by the figure in the "Years of Life Remaining" column which corresponds to the age (or next lower age) of the eligible individual as of the last birthday at the time the resource was transferred.
42	ISM for Life Example 1: Valerie Payne transferred nonhome real property valued at $185,000 to her sister. As compensation, her sister agreed to provide Ms. Payne with room and board in the sister's home for the rest of Ms. Payne's life. ISM development showed that her sister's total household expenses were $1,500 per month. The household consisted of 3 persons, including Ms. Payne who was age 53 at the time of the transfer. The CMV of the ISM was $6,000 per year ($1,500/3 = $500 per month X 12 months = $6,000). Then, $6,000 X 31.61 (average years of life remaining at age 50) = $189,660 compensation. In this case, Ms. Payne received FMV for the transferred resource. ISM is not counted because the individual prepaid for her own food and shelter with the value of the home she transferred (SI 00835.480D.)
43	ISM for Life Example 2: Assume the same case facts as example 1 except that Ms.Payne is 80 years old at the time of the transfer. As in example 1 the ISM is worth $6,000 per year. At 80 years of age the life expectancy table indicates 7.16 years. Multiplying 7.16 years times $6,000 results in compensation of $42,960. In this case there is uncompensated value of $142,040 ($185,000 minus $42,960). Therefore, Ms. Payne would be subject to a period of ineligibility for SSI because she transferred the house for less than fair market value.
44	LIFE EXPECTANCY TABLE The data in this table was developed by SSA's Office of the Chief Actuary for the Year 2000 Trustees Report. Use this table to determine the value of compensation of services for life and ISM for life. After you determine the yearly value of services (or ISM), multiply it by the "years of life remaining" for the year corresponding to the individual's age and gender. If the exact age is not on the chart, use the next lower age. For example, if an individual is age 47 at the time of the resource transfer, use the life expectancy corresponding to age 40 on the chart.
45	Exceptions—Transfers to a Trust - 01150.121 EXCEPTION FOR TRANSFERS TO A TRUST The period of ineligibility for transferring a resource at less than fair market value does not apply to an individual in the following situations.
46	Exceptions—Transfers to a Trust - 01150.121 1. The Trust is a Countable Resource The period of ineligibility does not apply to an individual who transfers resources to a trust if either of the following is true: __the portion of the trust attributable to the transferred resources is a countable resource of the individual (i.e., the trust is countable as a resource for purposes of determining SSI eligibility). (See SI 01120.200.) __the trust would be considered a countable resource but for the undue hardship provision applicable to trusts.
47	Exceptions—Transfers to a Trust - 01150.121 2. Transfers to a Trust for Disabled or Blind Child The period of ineligibility does not apply to an individual who transfers a resource to a trust established for the sole benefit of the individual's child of any age who is blind or disabled. This includes trusts qualifying as "Medicaid trust exceptions" in SI 01120.200 ff. (i.e., trusts established under Section 1917(d)(4)(A) and (C) of the Social Security Act).
48	Exceptions—Transfers to a Trust - 01150.121 3. Transfers to a Trust for a Disabled or Blind Individual Under Age 65 The period of ineligibility does not apply to an individual who transfers a resource to a trust established for the sole benefit of an individual including himself or herself who is under age 65 and is blind or disabled. This includes trusts qualifying as "Medicaid trust exceptions" in SI 01120.200 ff. (i.e., trusts established under Section 1917(d)(4)(A) and (C) of the Social Security Act).
49	Exceptions—Transfer of a Home Transfer to a Spouse or Child The period of ineligibility for transferring a resource at less than fair market value will not apply if the individual or individual's spouse transfers title to a home to his/her: spouse (including a separated spouse); or child under age 21 regardless of student or marital status; or child of any age or any marital status who is blind or disabled.
50	Exceptions—Transfer of a Home 2. Transfer to a Sibling The period of ineligibility for transferring a resource at less than fair market value will not apply if the individual or individual's spouse transfers title to a home to a sibling of the transferor: who has ownership interest (including life estate and equitable ownership) in the home; and who was residing in the transferor's home for at least 1 year immediately before the date the transferor becomes institutionalized.
51	Exceptions—Transfer of a Home 3. Transfer to a Son or Daughter In addition to the exception for the children listed in SI 01150.122A.1., the period of ineligibility will not apply if the individual or the individual's spouse transfers title to a home to a son or daughter who: was residing in the transferor's home for at least 2 years immediately before the date the individual becomes institutionalized; and who provided care to the individual which permitted the individual to reside at home instead of in an institution.
52	Exceptions—Transfer of a Home B. POLICY—RESIDING IN THE TRANSFEROR'S HOME For the purpose of determining whether the individual qualifies for the transfer of a home exception, the home must have been transferred to a person who resided in the transferor's home. A person resides in the transferor's home if it is that person's primary place of residence.
53	Exceptions—Transfer of a Home C. POLICY—PROVIDING CARE FOR THE TRANSFEROR The transfer of a home exception requires that the son or daughter (who received the transferred home) provided care that enabled the transferor to reside at home instead of in an institution or facility. Such care is substantial but not necessarily full-time care.
54	Exceptions—Transfer of a Home A son or daughter is providing care for purposes of this exception if he/she does most of the following for the transferor on regular basis: prepares meals; shops for food and clothing; helps maintain the home; assists with financial affairs (banking, paying bills, taxes); runs errands; provides transportation; provides personal services; arranges for medical appointments; assists with medication.
55	Exceptions—Transfer of a Home NOTE: The issue of providing care needs to be developed only when the resource is transferred to a son or daughter who is not blind or disabled, and who resides with the transferor for at least 2 years prior to the transferor becoming institutionalized.
56	Exceptions—Transfer of a Home D. POLICY—INSTITUTIONALIZATION For purposes of the transfer of a home exceptions, the following individuals are considered to be institutionalized: an individual who is an inpatient in a nursing facility; an individual who is an inpatient in a medical treatment facility and for whom Medicaid payments are made based on a level of care provided in a nursing facility; an individual who is eligible for home or community based services under a waiver granted under section 1915(c) or (d). (See SI 01310.207.) NOTE: An individual who meets one of these 3 criteria is considered institutionalized for purposes of this exception regardless of the FLA determination (e.g., FLA-A vs. FLA-D).
57	EXCEPTION FOR NON-HOME TRANSFERS TO CERTAIN FAMILY MEMBERS The period of ineligibility for transferring a non-home resource at less than fair market value does not apply if the resource was transferred to: the transferor's spouse (including a separated spouse); or another person for the sole benefit of the transferor's spouse; or the transferor's child of any age who is blind or disabled.
58	Pooled Special Needs Trusts How Corbexis Makes Distributions
59	Lifetime Disbursement Risk Scale RISK LEVEL 1 Result Allowable no matter what benefit or age of beneficiary Distribution Requested For Attorney, care manager, other professionals Supplemental medical needs not covered by Medicaid or Medicare
60	Lifetime Disbursement Risk Scale RISK LEVEL 2 Result Allowable for all SSI/Medicaid clients except for minor children living with parents or natural guardians. Distribution Requested For Car Cable TV Internet Entertainment Vacation or visitation Personal care (hair, nails, etc) Lawn care Babysitter Household Appliances TV, stereo, computer, other electronic equipment
61	Lifetime Disbursement Risk Scale RISK LEVEL 3 Result Payment for these items is considered In Kind Maintenance and Support (ISM). Beneficiary’s benefits maybe reduced by $208 (PMV) a month. Beneficiary must be very careful if receiving less than $208/month SSI. If SSI payment reduces benefit below $1, beneficiary may also lose Medicaid coverage. Beneficiaries attorney must notify benefit agency of payments. Items do not count as ISMs if beneficiary is only receiving Medicaid and resides in Florida. Distribution Requested For Support items that a parent would normally be responsible for Diapers Toys TV, stereo, computer, etc Phone Babysitter Lawn care Household appliances