MassHealth may soon penalize elders for transferring assets into pooled trusts. It seems that MassHealth plans to make this change by the end of the year, and is doing so in response to a May, 2008 Regional Medicaid Bulletin clarifying Medicaid policy regarding pooled trusts.
It also appears that elders who establish and fund a pooled trust account before the date of the new regulations will not be subject to a transfer penalty, and the regulation will not be retroactive.
If you are over the age of 65 and are considering a pooled trust account as a planning option, the time to act is now.
What Are Pooled Trusts & Why Are They Important?
Pooled trusts are run by non-profit organizations for the sole benefit of disabled individuals (including disabled elders). Each disabled person funds an individual trust account. The income and principal of the account are then available for the supplemental support of the elder during his or her lifetime. All of the individual trust accounts are combined (or “pooled”) by the non-profit organization for the purpose of making investments.
These accounts are incredibly important for Massachusetts elders, because without a pooled trust account a single elder can keep only $2,000 in liquid assets and only $72.80 per month in income while receiving long-term care benefits. This may not be enough for even basic needs such as clothing and hygiene products.
After the elder’s death, a percentage of the funds left will be retained by the charitable organization. This percentage ranges from 5% to 50%. The remainder of the trust assets must be used to repay the Commonwealth for its MassHealth expenses. If there are any funds remaining, those funds will pass to family members or other beneficiaries.
Massachusetts Pooled Trust Options:
There are four pooled trust organizations in Massachusetts:
1. The Family Trust of Massachusetts http://www.familytrustofmass.org/
2. PLAN of Massachusetts http://planofma.org/
3. The CJP Disabilities Trust http://is.gd/54SSg
4. The Berkshire County ARC http://bcarc.org/
Check out this comparison chart with useful information about Massachsuetts pooled trust options: http://is.gd/54Tkn
What Should I Do?
If you or a loved one is disabled and over the age of 65, you should talk with your elder law attorney as soon as possible about long-term care planning options. If a pooled trust is an attractive or recommended planning option, then the time to act is now.
Happy Thanksgiving Weekend!
-Audrey
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MassHealth never did change the regulations or start penalizing transfers to Pooled Trusts for disabled individuals over the age of 65, perhaps because of advocacy efforts on the part of MANAELA’s Public Policy Committee. Pooled trusts remain an excellent option for disabled elders in emergency spend down situations and for disabled persons of any age who have assets that would otherwise disqualify them from receiving public benefits (such as an inheritance or disability settlement).
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