A pooled supplemental needs trust is a way to provide the benefits of a supplemental needs trust for a disabled person without having to set up and administer a separate trust.  The funds transferred into a pooled trust are “pooled” and invested by an investment manager. Pooled trusts can be a great option if the amount of money available to fund the trust is small or where there is no person willing to serve as trustee.  However, there are significant downsides to a pooled supplemental needs trust.

What is the downside of a pooled supplemental needs trust?

Once you surrender your money to a pooled trust, you have no control over how it is spent or invested.  A pooled trust is managed by a manager selected by the non-profit company that adminsters the trust and not by a friend or family member that has a personal relationship with the beneficiary.  With a pooled trust, the non-profit company has control over the investments and disbursements.

The real downside of a pooled supplemental needs trust is that you do not have the close, personal relationship you will have with an individual trust created solely for your benefit. With a separate trust, you can name a friend or family member as a co-trustee with a trust company and this will ensure that your friend acting as the co-trustee will have input into investment and disbursement decisions.

With a separate trust, your funds are segregated from other trust accounts and you can monitor the investment performance of your trust. You do not have any control over investments or disbursements with a pooled supplemental needs trust.

What you can do to learn more about a pooled supplemental needs trust

In New York, pooled supplemental needs trusts are administered by NYSARC Trust Services based in Albany County (800-735-8924; info@nysarctrustservices.org).  The pooled supplemental needs trust, known as the “Unrestricted Fund”, requires a minimum initial deposit of $25,000, but NYSARC charges no commissions for investing the funds.  A great person to speak with at NYSARC is Robert Mascali, who can answer all of your questions about the six types of trusts administered by NYSARC.

If you would like more information about pooled supplemental needs trusts from me, I welcome your phone call on my toll-free cell at 1-866-889-6882 or you can send me an e-mail at jfisher@fishermalpracticelaw.com .  You are always welcome to request a FREE copy of my book, The Seven Deadly Mistakes of Malpractice Victims, by sending me an e-mail with your name and address.