Umbrella Pooled Trust
Every person with special needs is different, which means that every Special Needs Trust is going to be different as well. In 2001, the Corporation of Guardianship established the Umbrella Pooled Trust as an alternative to the traditional First Party (d)(4)(A) Special Needs Trusts and Third Party Special Needs Trusts. A Pooled Trust, also known as a “(d)(4)(C) trust,” is a Special Needs Trust with a twist. While a Pooled Trust serves the same function as the other types of Special Needs Trusts in that it preserves the beneficiary’s eligibility for public benefits, there are several notable differences.
A Pooled Trust must be established and administered by a non-profit organization, with individual beneficiaries creating accounts within the larger trust. All funds are managed as a pool and invested as one account. However, the profits and losses, additions and disbursements from each account are tracked separately.
Besides public benefit protection, Pooled Trusts can offer additional significant value to beneficiaries, especially those with smaller trusts. By pooling contributions from many beneficiaries, the trust is able to make stronger investments. Most beneficiaries’ funds could never perform as well in the financial market as those funds will perform when strengthened by their addition to a pool.
If you are interested in joining the Umbrella Pooled Trust, please CONTACT US.
What is a Pooled Special Needs Trust?
A Pooled Trust, also known as a “(d)(4)(C) trust,” serves the same function as the other types of Special Needs Trusts in that it preserves the beneficiary’s eligibility for public benefits, but with several notable differences. A Pooled Trust is established by a non-profit organization, with individual beneficiaries creating sub-accounts within the larger trust. All funds are managed as a pool and invested as one account. However, the profits and losses, additions, and disbursements from each account are tracked separately.
How does the Corporation of Guardianship serve as trustee of a Pooled Trust?
In 2001, the Corporation of Guardianship established the Umbrella Pooled Trust. As trustee of the Umbrella Pooled Trust, CoG’s fiduciary responsibilities are the same as those outlined in SPECIAL NEEDS TRUSTS FAQs. Additional responsibilities include these:
- Completing and reviewing the documents associated with joining and maintaining participation in the Umbrella Pooled Trust.
- Handling the management of each Pooled Trust sub-account, including investing with financial institutions.
- Keeping detailed records of each beneficiary’s sub-account and property.
- Providing account statements to each beneficiary.
- Making all disbursements for the benefit of the beneficiary.
- Managing the use of retained funds for the benefit of other individuals with disabilities.
When is a Pooled Trust used?
Here are some examples of when a Pooled Trust might be the most appropriate option:
- THE BENEFICIARY IS OVER THE AGE OF 65: Unlike First Party (d)(4)(A) Special Needs Trusts, which may be created only for those under age 65, Pooled Trusts may be for beneficiaries of any age.
- THE BENEFICIARY CREATES THE TRUST HIM OR HERSELF: A First Party (d)(4)(A) Special Needs Trust is created by a parent, grandparent, or legal guardian. It cannot be created by the beneficiary him or herself. A Pooled Trust may be created by the beneficiary.
- THE TRUST IS FUNDED WITH A SMALLER AMOUNT OF MONEY: By pooling contributions from many beneficiaries, the trust is able to make stronger investments. Most beneficiaries’ funds could never perform as well in the financial market as those funds will perform when strengthened by their addition to a pool.
- A TRUSTEE CANNOT BE FOUND: Most banks and financial institutions require substantial minimum balances to establish a trust. Smaller trusts may be turned away by these institutions, but they can participate in a Pooled Trust. Because the pooled trust is managed by a non-profit organization, it is not necessary to find a trustee who is willing to manage the trust.
How do I join the Corporation of Guardianship’s Umbrella Pooled Trust?
The process of joining the Umbrella Pooled Trust is relatively simple. When you’re ready to join, you will sign a joinder agreement and pay a one-time nonrefundable enrollment fee. The joinder agreement links you or your loved one to the master trust provisions.
Do I need legal assistance to join the Umbrella Pooled Trust?
Because a Pooled Trust is a legal document, anyone interested in joining CoG’s Umbrella Pooled Trust should consult with an attorney. We do not have any attorneys on staff, but we are happy to work with you and your attorney to assist you in completing the necessary forms to join the Umbrella Pooled Trust.
Where can I learn more about Pooled Trusts?
National Academy of Elder Law Attorneys
Special Needs Alliance
Special Needs Answers
Who May Join the Umbrella Pooled Trust?
Any person with a disability of any age who:
- Is currently receiving public benefits or may receive benefits in the future, AND
- Has received a lump sum of money or assets (an inheritance, a personal injury settlement), AND
- Would like the benefit of pooled investments and management by a non-profit organization.
I have found when someone from the Corporation of Guardianship says they are going to do something, it gets done