Ask Our Expert


First-Party Pooled Special Needs Trust

First-Party Pooled Special Needs Trusts are an option for individuals with disabilities who have assets of their own (through a settlement, inheritance, back-payment, or other means). Unless these funds are spent down or placed in a properly created Special Needs/Pooled Trust, the beneficiary may lose his or her benefits. The Omnibus Budget Reconciliation Act (OBRA) of 1993 allows for this type of trust, which can preserve Medicaid and SSI, to be created. There are restrictions on how funds are spent and payments cannot be made directly to the individual with a disability, as this may reduce or eliminate benefit payments or eligibility. This type of trust must be established prior to the beneficiary’s 65th birthday and the individual must have been considered disabled prior to the age of 65 under Social Security or SSI definitions. Medicaid regulations require that the trust be irrevocable, the trust funds be used for the sole benefit of the Trust Beneficiary, and Medicaid payback is required as per North Carolina statute. Life Plan Trust, as the non-profit agency serving as Trustee, would also retain a part of the remaining assets, as per statute.