How a Pooled Trust Can Secure Medicaid Eligibility Without Sacrificing Assets.
- Whitehead and Munson
- Jul 25
- 2 min read
Updated: Aug 15
For many with disabilities or facing advanced age, unexpected income or assets can unintentionally disqualify them from essential means-tested benefits like Medicaid or SSI.
A pooled trust offers an elegant solution—it allows individuals to preserve eligibility while ensuring their funds still support meaningful needs.
What Is a Pooled Trust?
A pooled trust is a non-profit–run special-needs trust under federal law (42 U.S.C. § 1396p(d)(4)(C)), set up by the individual, a parent, grandparent, guardian, or a court. While funds are combined for investment, each participant has a separate sub-account tied to their own benefit.
Who Qualifies?
Eligible participants include those with a physical or mental disability lasting at least 12 months, as defined by the SSA. Importantly, individuals over 65 may qualify—some states allow them to join even later in life.
Pooled Trusts and Medicaid
If you have too much income to qualify for Medicaid benefits, you can set up a pooled trust to meet the eligibility limits. A non profit pooled trust program is a trust managed by approved non-profit organizations, which handle the funds for multiple beneficiaries. Each month, you transfer the amount of income over Medicaid’s limit into your pooled trust account.The trust can pay for qualified expenses such as housing, utilities, medical needs not covered by Medicaid, and personal items.
"By moving the “excess” into the pooled trust, your countable income drops below the Medicaid threshold, allowing you to keep your benefits."
How the Trust Works
Transfers into the trust remove those funds from eligibility calculations—assets placed into the trust are no longer “countable”. The nonprofit trustee invests the pooled resources, allowing access to higher-tier financial products and professional oversight. Account holders can request distributions for supplemental needs—approved uses range from rent, clothing, therapy, transportation, to entertainment—while strictly excluding basic covered expenses, loans to others, or shared household costs.
Advantages & Considerations
Cost-effective & professional: Lower administration rates and expert oversight make it a practical alternative to individualized trusts.
Maintains benefits: Funds in the trust don't jeopardize Medicaid or SSI eligibility.
Irreversibility & payback: Trust funds are irrevocable; leftover assets may be retained by the nonprofit or used to reimburse Medicaid after the beneficiary’s death.
Fees and structure: Setup fees, ongoing admin charges, and spending restrictions vary; beneficiaries should compare nonprofit options carefully.
Why Choose a Pooled Trust?
Individuals with modest funds can retain eligibility without complex individual trusts.
It’s ideal when seeking Medicaid/SSI while preserving income for quality‑of‑life needs.
Nonprofit administration ensures compliance and tailored disbursement oversight.
A pooled trust can be a powerful planning tool—but it’s not one-size-fits-all. Choosing the right nonprofit provider, understanding fee structures, and navigating payback rules all require expert guidance.
Comments