SPECIAL NEEDS TRUSTS: Pt. 3 – Pooled Trust Mistakes

Aside from the individually structured first and third party special needs trusts, a pooled SNT is a trust that is for multiple individuals with special needs. A pooled SNT is a trust that is established and managed by a non-profit organization. It is a trust that pools together all of the assets of the disabled individuals that have accounts through the trust, as well as assets acquired through outside donations, and makes distributions to the beneficiaries based on their individual shares of the trust’s assets. Pooled SNTs are a way to relieve family members of the job of being the trustee and allows professionals to handle the tedious responsibilities of being the trustee. Some important aspects that set apart pooled SNTs from first and third party SNTs are:

  • Pooled SNTs do not have any age limits;
  • The disabled person is able to be one of the grantors of the trust; and
  • Any excess funds at death are generally kept by the non-profit.

While there are many benefits of being a part of a pooled SNT, there are many mistakes to avoid when planning to join a pooled SNT. One of the first mistakes that people make when pursuing admission to a pooled SNT is not seeking legal advice on the issue. There are many different types of pooled SNT, and all vary from the type of care they give, to the ways they handle the trust’s assets. It is vital to have an experienced legal professional help plan which trust is best for the unique needs of the disabled person. Another mistake that family members of the disabled person’s family must avoid is failing to update their own estate planning documents. Failing to update your own estate plan to make the disabled person’s pooled SNT one of the beneficiaries of your will, trust, life insurance, or retirement accounts will cause an unnecessary delay in the beneficiary receiving the money.

One of the biggest mistakes that people in this situation make is failing to plan at all. While you are alive, you may be the primary caregiver as well as the trustee of a disabled person’s SNT, whether a first party SNT or a third party SNT. But, what will happen to their care and financial security after you pass? It is essential to have a seamless plan in place to allow the disabled person to continue receiving the necessary funds and care they need to live a comfortable life. A pooled trust may be the best tool for that plan, and may be worth pursuing.

A pooled SNT may be the best plan for preserving a disabled person’s assets and ensuring quality care. If a member of your family is disabled, and has not already set up an SNT, call Bill Hesch, attorney, CPA, and financial planner, to find out if a pooled SNT would be in their best interest, or to receive a second opinion on your existing SNT plan.

Bill Hesch is a CPA, PFS (Personal Financial Specialist), and attorney licensed in Ohio and Kentucky who helps clients with their financial and estate planning.  He also practices elder law, corporate law, Medicaid planning, tax law, and probate in the Greater Cincinnati and Northern Kentucky areas.  His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky.


(Legal Disclaimer:  Bill Hesch submits this blog to provide general information about the firm and its services.  Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel.  While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog.  Bill Hesch does not enter into an attorney-client relationship with any online reader via online contact.)