The Charitable Pooled Trust (d4C)

May 29, 2015

By Rick Law, Managing Partner at Law Elder Law Estate Planners, and Senior Advocates in Aurora, Illinois, just West of Chicago off the I-88 tollway.

It’s a story I’ve told many times… Zoe was fortunate to live in a state that allowed her personal representative, guardian, or power of attorney to fund a pooled trust from her husband’s assets. This is allowable in certain states even though the person may be over 65.

This type of trust is referred to as a d4C Pooled Trust. The virtue of the d4C is that it can be funded with a senior’s assets so as to provide and pay for special needs that would not be covered by the state’s nursing home Medicaid program.

But regardless of the amount of money in the pooled trust, Zoe can still be eligible for nursing home Medicaid. There was a state Medicaid payback requirement from any funds remaining in the pooled trust after Zoe’s death.

For Zoe, she was able to use her assets to fund the pooled trust and qualify for institutionalized care paid for by the state’s Medicaid program.

Because of the funding of her pooled trust, she enjoyed a much higher level of services in her time of greatest need. Her trustee used her pooled trust funds to pay for things such as

• out-of-pocket medical and dental costs,
• personal care attendance,
• nursing home advocate,
• rehabilitation services,
• legal fees,
• clothing and eyeglasses, and
• many other needs, as long as they were solely for the benefit of Zoe.

A d4C trust is funded directly by an inter vivos transfer of assets of the person with disabilities or with assets from a living spouse.

If you were to have a special-needs trust created with your own assets (or your spouse while he or she is alive), this trust is referred to as “self-settled,” and at the death of the person with disabilities, the remaining assets are subject to claims by the state up to the amount expended on the person through public benefits. This trust is also commonly referred to as a “pooled trust” and can be used when a person with disabilities who is on public benefits receives an inheritance or a lump-sum settlement.

The d4C trust must be established and managed by a nonprofit association. A separate account is maintained for each beneficiary of the trust, but, for purposes of investment and management of funds, the trust pools these accounts.

A spouse could create such a trust for the spouse with disabilities with a certain amount of funds during the healthy spouse’s lifetime in order to protect that amount of money for the special needs of the spouse with disabilities.

If you’re ready to start getting your estate in order and secure your assets for the “worst-case” scenario, please give our office a call at 800-310-3100. Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now.

Sincerely,

Rick L. Law, Attorney, Estate Planner for Retirees

Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law Elder Law, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.   Call 800-310-3100 for your free consultation now!