Q. What is the difference between a Special Needs Trust and Pooled Trust?
A. A pooled trust is a special needs trust administered by a nonprofit organization. The nonprofit organization acts as Trustee and manages the trust sub-accounts. The sub-accounts are accounted for separately, but the assets and administration of the trust is “pooled” in order to be more cost effective.
A special needs trust that is not a pooled trust is considered a private special needs trust. Both a private special needs trust and a pooled trust serve the same function: as a resource that allows individuals with disabilities to retain public benefits when asset limits are exceeded.
A private special needs trust can only be created for a person 64 years of age or younger. The individual establishing the private special needs trust must select someone to manage the trust. A pooled trust does not have any age restrictions for creating the trust. However, there may be issues with funding for individuals age 65 and older.