As a Florida resident who has a child with special needs, you may have concerns about whether leaving money behind for that child may impact his or her eligibility for means-based government benefits. Having too much money available may hurt your child in the long run by disqualifying him or her from Medicaid or Supplemental Security Income. You may be able to get around this by establishing a first-party special needs trust or a pooled special needs trust.
According to the Special Needs Alliance, there are certain situations in which having a pooled special needs trust might suit your needs better than a traditional special needs trust.
How the pooled trust works
Nonprofit organizations oversee pooled special needs trusts, and your child with a disability then has his or her own sub-account. Both first-party and third-party special needs trusts exist. However, there are different rules for each type when it comes to having to reimburse Medicaid.
Why you might consider a pooled trust
Many people in your shoes opt for pooled special needs trusts because they grant your child access to a stable, professional trustee. Managing a special needs trust is often complex, but working with someone well-versed in how they work may expand investment opportunities. It may, too, help ensure that everyone stays in the know about any changes in benefit rules and related matters.
Considerable variation exists from one pooled trust to the next in terms of how they work and the rules that surround them. The pooled special needs trust that may suit your needs depends on the specifics of your situation.