A pooled trust is a particular type of irrevocable trust that can offer many benefits to those who qualify for Medicaid benefits. If you are helping a family member or friend navigate the options available to them, understanding what is and isn’t possible with a pooled trust can be an essential part of understanding their best options.
There are several potential advantages to using a pooled trust in order to qualify for Medicaid; however, there must be some caveats taken into account before making any final decisions.
If you have concerns about how this may impact your loved one, it’s essential to understand the ins and outs of their situation.
Read on for more details about what a pooled trust is, its pros and cons, and whether it may be the right choice for your loved one.
What Is a Medicaid Pooled Trust?
A Medicaid pooled trust is a particular type of irrevocable trust that can be used to help a person with disabilities qualify for Medicaid benefits.
A pooled trust such as the KTS Pooled Trust may be useful for those with limited financial assets and who need assistance qualifying for Medicaid coverage. The trust can hold a person’s assets such as cash, stocks, real estate, vehicles, and other valuables while living and using medical assistance but be used to help pay for their long-term care should they need it.
This type of trust, managed by a state organization, holds a person’s assets while they are living and then distributes them to pay for their long-term care should they need it.
Note that a pooled trust differs from other types of trusts in that a state agency must administer it. It can be created by a parent or guardian helping their child qualify for Medicaid services.
Understanding the Basics of Qualifying for New York State Medicaid
Before discussing the pros of a Medicaid pooled trust, it’s essential to understand the basics of what it takes to qualify for New York State Medicaid and why it’s so difficult.
Medicaid is a joint health insurance program between the federal and state governments that helps people with limited income and assets pay for health care.
To qualify for Medicaid, a person must have limited income, assets, and no health insurance to cover their treatment.
Income is generally defined as gross income (before any deductions), fewer deductions than the government allows. Assets are anything that can be converted into cash and usually do not include the person’s place of residence, household goods, clothing, medical equipment, or vehicles needed for transportation to work or medical appointments.
Benefits of a Medicaid Pooled Trust
There are several benefits to using a Medicaid pooled trust.
First, it will help your loved ones keep their assets. If your loved one has a car, stocks, or other valuable possessions, they may have to sell them to pay for long-term care. While these items are likely to have some value, they may not be enough to cover long-term care costs.
A Medicaid pooled trust can hold these assets and provide for the cost of long-term care without your loved one having to part with them.
Another benefit to a pooled trust is that a person can still receive gifts or inheritances while using the trust. If a person does not use a pooled trust, any gifts or inheritances will be used to pay for their medical care.
Final Words: Should You Use a Medicaid Pooled Trust?
A Medicaid pooled trust may be the best option for your loved one, especially if you consider the tips listed above.
If your loved one has very little in the way of assets but needs long-term care, they may qualify for Medicaid. The only way to know for sure is to get their situation assessed. This can be done by speaking to a social worker at the state Department of Health.