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 government benefit 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 a Medicaid payback provision is required as per North Carolina statute.
During the enrollment process, the grantor will execute our Declaration of Trust and Joinder Agreement. Our legal documents have been reviewed by the Social Security Regional Office of General Counsel (OGC). OGC issued an opinion that our documents meet precedence and complies with the requirements for a pooled trust under section 1917(d) (4) (C) of the Social Security Act, and the relevant provisions of the Program Operations Manual System (POMS). Life Plan Trust staff cannot give you legal advice regarding your estate and advise you to seek independent legal counsel before executing the Declaration of Trust and Joinder Agreement if you have questions or concerns. Additionally, Life Plan Trust cannot give you financial or tax advice and advise you to seek a certified financial planner and licensed tax accountant or certified public accountant to discuss financial strategies and tax questions.