| Read Time: 3 minutes | Medicaid

Understanding Medicaid and how to protect your assets can be challenging, especially when considering the different options available. One such option in New York is the pooled trust for Medicaid, which can help individuals retain their eligibility for Medicaid while preserving their assets. This informational piece will guide you through the basics of Medicaid pooled trusts in New York, explaining what they are, how they work, and why they might benefit you or your loved ones.

What Is a Pooled Trust for Medicaid?

A pooled trust for Medicaid is a type of special needs trust that allows individuals with disabilities to maintain their Medicaid eligibility while protecting their assets. Managed by a non-profit organization, these trusts pool the resources of multiple beneficiaries for investment and management purposes while maintaining separate accounts for each individual.

Benefits of a Pooled Trust for Medicaid

There are several key benefits to using a pooled trust for Medicaid, including:

  • Asset protection—by placing assets in a pooled trust, you can protect them from being counted as resources for Medicaid eligibility, ensuring you continue to receive benefits;
  • Supplemental needs—you can use the funds in a pooled trust for expenses not covered by Medicaid, such as housing, utilities, and personal care items, improving the quality of life for beneficiaries; and
  • Professional management—non-profit organizations managing pooled trusts have experience and expertise in handling funds for individuals with disabilities, providing peace of mind that the assets are being managed responsibly.

Using a pooled trust can strategically balance the need for Medicaid benefits with the desire to protect and use your assets for additional support.

NYS Pooled Trust for Medicaid

In New York State (NYS), a pooled trust for Medicaid can be essential for individuals with disabilities or older adults who want to preserve their income and assets. Setting up a pooled trust involves the following steps: 

  • Choose a non-profit organization. You should select a reputable non-profit organization that manages pooled trusts in New York. Research and choose an organization with a good track record.
  • Establish the trust account. Work with the chosen organization to set up the trust account. Setting up the account will involve completing the necessary paperwork and providing information about the beneficiary.
  • Fund the trust. Transfer the assets or income into the trust through monthly or lump-sum payments.
  • Trust management. The non-profit organization will manage the funds, ensuring they are used for the beneficiary’s needs without affecting Medicaid eligibility.

By following these steps, you can set up an NYS pooled trust for Medicaid that protects your assets while ensuring you or your loved one continues to receive necessary benefits.

Pooled Income Trust for Medicaid

A pooled income trust for Medicaid helps individuals whose income exceeds Medicaid’s eligibility limits.  Each month, the individual deposits excess income into the pooled trust, which is the amount over the Medicaid eligibility limit. The non-profit organization managing the trust then uses these deposited funds to pay for the beneficiary’s allowable expenses, such as rent, utilities, and medical bills. Since the excess income is placed into the trust and not counted as available income, the individual remains eligible for Medicaid benefits. By using a pooled income trust, individuals can maintain their Medicaid eligibility while using their income to cover necessary expenses, providing a practical solution for those with higher income levels.

Common Expenses Covered by Pooled Income Trusts

A pooled income trust can cover various expenses that Medicaid does not, including:

  • Rent or mortgage payments,
  • Utility bills,
  • Medical expenses not covered by Medicaid,
  • Personal care items and services, and
  • Home modifications for accessibility. 

Ensuring that the funds are used for approved expenses is crucial to maintaining Medicaid eligibility and benefiting fully from the trust.

Is It Time to Start Thinking About Medicaid Planning?

If you haven’t yet put a plan in place to qualify and apply for Medicaid benefits, now is the time to do so because the longer you wait, the fewer options you’ll have. At the Law Office of Andrew M. Lamkin, P.C., our New York estate planning attorneys provide common-sense solutions designed to address your most pressing needs. We see our role as helping you to resolve your issues so you can focus on what’s important—all while knowing that your affairs are in order. To learn more about our firm and the services we provide, call the Law Office of Andrew M. Lamkin, P.C., or connect with us through our secure online contact form.

Author Photo

Andrew Lamkin is principal in the law firm of Andrew M. Lamkin, P.C., where he focuses his practice in the areas of elder law, estate planning and special needs planning, including Wills and Trusts, Medicaid planning, estate administration and residential real estate transactions. He is admitted to practice law in New York and New Jersey.

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