Pooled Trusts: Is the End Near?

Todd Bartimole

Ohio is one of few states that allows funding of a “Pooled” trust for persons over 65 years of age.

What is a pooled trust?

 A pooled trust holds assets of disabled persons without the funds being counted towards the asset ceiling for persons applying for Medicaid.  Transfers to a pooled trust are not considered “improper transfers” by Medicaid.  The person setting up a pooled trust may both be on Medicaid, and use the pooled trust for his or her special needs.

In most parts of the country, federal law seems to put a limit on the funding of pooled trust to those who are under 65 only.  Unlike most states, Ohio’s regulations specifically state that a pooled trust may be created by a person of “any age.” This permits those who are going into a nursing home to protect some of their assets for use after they qualify for Medicaid.

Bad news for many over 65

A recent court case in the US District Court in Maine seems to hold that a state may penalize people who are 65 or older when they fund a pooled trust. In Richardson v. Hamilton, Comm, Maine Dept. Health and Human Services, the USDC of Maine stated that “[the pooled trust statute§ 1396p(c)(2)(B)(iv)]  exempts transfers to pooled special needs trusts from the transfer penalty only if the beneficiary is under the age of sixty-five.”

Ohio Regulations still allow Pooled Trusts for those over 65

Several years ago there was an outcry from advocates when the State of Ohio proposed limiting Pooled Trusts to those over 65.  Ohio did not implement the change.  As of today, Ohio regulations specifically allow a person of “any age” to establish a pooled trust.  This can be a fantastic planning tool for aged persons who are in need of long term care who want to maintain some funds for their personal needs.

This new ruling might have Ohio regulators thinking about lowering the age of those who can create pooled trusts again.

If you have questions about pooled trusts, please contact Todd W. Bartimole at 216-472-4659.

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