“Pooled Trust” means that the funds from each separate trust are “pooled” for investment purposes only. Each beneficiary has his or her own separate trust sub-account and only that beneficiary has access to his or her subaccount. By “pooling” the funds for investment only, the administrative costs and overhead are reduced because they are shared by all of the trust accounts.
For Attorneys
DISCLAIMER: The information contained below is general in nature and is not intended to be legal advice with regard to any specific situation. Anyone who is interested in establishing a special needs pooled trust should seek the advice of an attorney.
PLAN of Massachusetts and Rhode Island (PLAN of MA and RI) is a Massachusetts 501(c)(3) non-profit corporation that operates two special needs pooled trusts to benefit people with disabilities.
Both pooled trusts meet federal and state law requirements that protect a trust beneficiary’s public benefits and enable funds in the trust account to supplement the trust beneficiary’s needs. Both pooled trusts provide for the orderly management, investment and distribution of assets that are pooled for purposes of investment and management, but which are held in separate sub-accounts for the benefit of individuals with disabilities.
Both Pooled Trusts are irrevocable, discretionary and to be used for the sole benefit of the trust beneficiary.
Funds in both pooled trusts are managed and invested by Cambridge Appleton Trust, National Association (CATNA). CATNA is advised by the PLAN of MA and RI Board of Directors Executive Committee. Each trust sub-account is a grantor-type trust for the purposes of the U.S. Internal Revenue Service and for determining the beneficiary’s individual tax liability, if any. PLAN of MA and RI and CATNA will provide a K-1 Form to all trust beneficiaries. Neither PLAN of MA and RI nor CATNA is responsible for preparing IRS Form 1040 or its state equivalent.
The MARC Special Needs Pooled Trust (MARC Trust) is funded with assets that belong to the person with a disability, who is also the beneficiary of the trust. This trust can be established by the individual with a disability, or by his or her parents, grandparents, power of attorney, guardian, or court. PLAN of MA and RI has operated this trust since 1995.
This is a Medicaid payback trust. Upon the death of the trust beneficiary, PLAN of MA and RI retains 25% of the remaining balance to help other people with disabilities. Medicaid is then entitled to be reimbursed from the remaining balance for services that were paid for over the trust beneficiary’s lifetime. Any funds that remain after Medicaid’s recovery are distributed to the persons or organizations named by the trust beneficiary in the Instrument of Trust Assignment.
The PLAN of Massachusetts and Rhode Island Third Party Special Needs Pooled Trust (Third Party Trust) is created and funded by a third party (usually a family member) for the benefit of the person with a disability. PLAN of MA and RI has operated this trust since 2005.
This is not a Medicaid payback trust. The donor(s) designate who will receive any remaining balance upon the death of the trust beneficiary. PLAN of Massachusetts and Rhode Island does not retain any of the balance remaining at the trust beneficiary’s death unless the donor chooses to designate a portion of the remainder to PLAN of MA and RI.
The Donor can fund the Third Party Trust during his or her lifetime (current funded) or through the donor’s estate plan or insurance policy (future funded). If it is being future funded, PLAN of MA and RI has specific suggested language to be included in the donor(s) Will, insurance policy or other document.
The benefits of using a PLAN of Massachusetts and Rhode Island Pooled Trust include:
- Professional Trust Administration by an Independent Trustee.
- Case Management Services that are provided by licensed social workers who have specialized knowledge of the basic and unique needs of people with disabilities.
- Monitoring and safeguarding the trust beneficiary’s SSI, Medicaid and other governmental benefits.
- No requirement for a minimum amount to fund the trust.
- Affordable transaction costs to set up the trust.
Establishing a PLAN of Massachusetts and Rhode Island MARC Trust:
The first step in establishing a MARC Trust is to complete and submit the MARC Application Form and the enrollment fee to PLAN of Massachusetts and Rhode Island. The non-refundable, one time enrollment fee is $600 if the beneficiary will be signing the Trust Assignment documents; $750 if there is a court order or a power of attorney involved. The check for the enrollment fee should be made payable to "PLAN of Massachusetts and Rhode Island". The front of the check should include "f/b/o (beneficiary's name)".
If the trust beneficiary is under guardianship or conservatorship, you must also submit the court order authorizing the funding of the trust.
If the trust beneficiary has an attorney in fact through a Power of Attorney, the Power of Attorney document should be submitted with the completed application.
After reviewing the application, a PLAN of MA and RI attorney prepares an Instrument of Trust Assignment. This is returned to the attorney for the appropriate signature.
The signed Instrument of Trust Assignment is returned to PLAN of MA and RI, together with the check to fund the trust account. The check to fund the trust should be made payable to "Cambridge Appleton Trust, N.A.". The front of the check should include "f/b/o (beneficiary's name)".
PLAN of MA and RI establishes the account and notifies the attorney of the date that the trust account was established.
PLAN of MA and RI mails a Welcome Packet to the trust beneficiary or his/her representative. This details how to request disbursement from the trust account.
The PLAN of MA and RI Service Coordinator who is assigned to the beneficiary contacts the beneficiary and/or his/her representative to schedule an initial meeting to discuss a spending plan.
Establishing a PLAN of Massachusetts and Rhode Island Third Party Special Needs Pooled Trust:
The first step in establishing the Third Party Pooled Trust is for the donor(s) to complete, sign, and submit the Joinder Agreement to PLAN of Massachusetts and Rhode Island. The enrollment fee must be submitted with the Joinder Agreement. The one-time, non-refundable enrollment fee is $750. The check for the enrollment fee should be made payable to "PLAN of Massachusetts". The front of the check should include "f/b/o (beneficiary's name)".
After review of the Joinder Agreement by a PLAN of MA and RI attorney, the Joinder Agreement is signed by the PLAN of Massachusetts and Rhode Island designee.
PLAN of MA and RI sends the donor(s) attorney a copy of the Joinder Agreement.
If the trust is current funded, PLAN of MA and RI sends the donor(s) a Welcome Packet. The donor will also be asked to complete the Life Care Plan that is included with the Welcome Packet. The Life Care Plan is updated annually. The PLAN of MA and RI Service Coordinator assigned to the trust beneficiary will contact the donor. For future funded accounts, the donor will be asked to complete and submit a Life Care Plan. The Service Coordinator to the trust beneficiary will check in with the donor annually to update the Life Care Plan. Checks for deposit to the trust should be made payable to "Cambridge Appleton Trust, N.A.". The front of the check should include "f/b/o (beneficiary's name)".
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Frequently Asked Questions
What is a “Pooled Trust”?
Are there different types of Special Needs “Pooled Trusts”?
There are two different types of pooled Special Needs Trusts based on who “owns” the money that funds the trust. If the money belongs to the trust beneficiary, it will go into the MARC Special Needs Pooled Trust. If the money belongs to someone other than the trust beneficiary, it will be put into the PLAN of Massachusetts and Rhode Island Third Party Special Needs Pooled Trust.
Is there a minimum or maximum amount for establishing a Pooled Trust Account?
There is no minimum or maximum amount for establishing a Pooled Trust Account. Because there are annual management and other fees charged to each subaccount, we encourage everyone to look at these fees before establishing an account.
How do I fund a Pooled Trust?
A Pooled Trust is funded with cash assets. Cash assets may be generated by checks, money orders, annuities, insurance policies, wills, inheritances, savings accounts, etc. A Pooled Trust cannot accept real or personal property.
Do I need my own attorney to establish a Pooled Trust?
Because a Pooled Trust is a legal document, anyone interested in establishing either of the Pooled Trusts should consult with an attorney. PLAN of Massachusetts and Rhode Island cannot provide legal advice about any specific situation. PLAN of Massachusetts and Rhode Island works with your attorney throughout the process of establishing a Pooled Trust account.
After I put money into the Pooled Trust, can I change my mind and remove my money?
No. By law the Pooled Trust is irrevocable.
Who manages the money in the Pooled Trust?
Funds from the individual sub-accounts are pooled together and invested by the Financial Manager, Cambridge Appleton Trust, N.A. There are a number of safeguards that limit the vulnerability of the pooled trust investments. These safeguards include rigorous reviews every 18 months by the Office of the Comptroller of the Currency (OCC), liability insurance, and internal audits that include annual inspection of financial records.
PLAN of Massachusetts and Rhode Island has the power to change the Financial Manager if we believe that their performance is not satisfactory.
What happens to money remaining in a Pooled Trust subaccount after the beneficiary dies?
This depends on which pooled trust you established.
With the MARC Special Needs Pooled Trust, which is self-funded, after a beneficiary dies, PLAN of Massachusetts and Rhode Island retains 25% of the balance remaining after certain administrative expenses are paid. PLAN of Massachusetts and Rhode Island uses this money for charitable purposes. Because this is a Medicaid Pay Back Trust, Medicaid is entitled to be reimbursed from the balance then remaining for any services it made to the beneficiary during his or her lifetime. Any balance, after these payments, is distributed to the remainderpersons named in the Instrument of Trust Assignment.
The PLAN of Massachusetts and Rhode Island Third Party Special Needs Pooled Trust does not require that Medicaid be reimbursed or that PLAN of Massachusetts and Rhode Island retain any portion of the balance remaining after the beneficiary’s death. The donor(s) name the remainderpersons who are to receive any balance remaining (after certain administrative expenses are paid) in the Joinder Agreement.
What are the fees for the Pooled Trust?
Fee schedules for each trust can be found under Related Forms in the "Getting Started" or "For Attorneys" sections.
