Seven Things to Do When Planning for the Financial Future

Seven Things to Do When Planning for the Financial Future

For families providing care and financial support for a loved one living with a disability, the thought of no longer being there can be overwhelming. Planning for the future is sometimes put aside to deal with the “here and now”. But when an individual lives with a disability that can affect their ability to work or manage their finances, it’s important that parents or caregivers plan ahead and ensure that there are funds available for the continued well-being of their loved one. One financial tool that can help is a Pooled Special Needs Trust (PSNT).

Here’s what you need to know about PSNTs to start planning:

1. Understand the benefits of a PSNT
A PSNT can provide peace of mind. It is a way to set aside and preserve funds that will be
solely used to enrich the quality of life for an individual living with special needs. In the
process it can protect means-tested government benefits (Medicaid and SSI) and assist with money management for an individual, who due to the nature of his or her disability, needs to have financial decisions made on his or her behalf. An individual with a disability can have no more than $2000 in countable assets in order to qualify for Medicaid and SSI. Placing funds in a PSNT can protect these benefits and provide access to funds to supplement these programs and improve quality of life.

2. Understand how a PSNT operates
A PSNT is administered by a nonprofit organization. A separate account is established forScreen Shot 2018-01-18 at 11.24.18 AMeach Beneficiary, but the funds are “pooled” to provide greater investment opportunities and lower administrative expenses. Funds in the trusts are pooled together for investment purposes, but an accounting is maintained in each Beneficiary’s sub-account. Financial statements are mailed quarterly or online access is made available to authorized individuals. The pooled trust organization makes decisions on how funds from the trust are spent, oversees investments of the funds, fulfills reporting requirements to government agencies and stays abreast of changing regulations with regard to SSI and Medicaid.

3. Research ways to fund a trust
Inheritances, life insurance policies, employer benefits and gifts from friends and family are all common ways to fund a PSNT.

4. Research funding requirements and fees
Funding requirements, enrollment fees and ongoing administration fees will vary by
organization. Generally, a pooled trust organization has low minimum funding requirements, often as low as $5,000, and lower enrollment and ongoing fees. Minimums and fees are usually much higher with a traditional financial institution and many require a minimum of $350,000 to $750,000 to fund the trust.

5. Know how the funds in the trust can be used
The trust can pay expenses that will enrich the quality of life for the beneficiary. Examples of disbursements that can be made include, but are not limited to, prescription and nonprescription medication and devices that are not paid for by Medicaid such as eye glasses, hearing aids, dental services and prosthetic devices, assistive technology like iPads, internet services, educational expenses, transportation, household items, recreational expenses, furniture, clothing and electronic equipment.

6. Be assured a family member or other trusted individual will play an important role
When establishing a PSNT, advocates are named who will work closely with the pooled trust organization to provide information about the beneficiary’s needs and wants and to submit disbursement requests for the benefit of the beneficiary. An advocate is generally a relative, guardian, conservator, case worker, agent under a power of attorney, or the beneficiary himself or herself.

7. Seek Professional Advice
Estate planning attorneys, financial planners and case managers are there to help. Each can give their perspectives on long-term financial planning that will best suit your particular situation. Be sure to discuss his/her expertise in special needs trusts and the benefits of pooled special needs trusts.

For more information about Pooled Special Needs Trusts, contact Joanne Marcus, MSW, Executive Director of Commonwealth Community Trust (CCT), a nonprofit pooled trust administrator operating nationwide since 1990. Call (804)740-6930 or visit CCT’s website:

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