Pooled trust option for seniors in both New York and New Jersey

Pooled trust option for seniors in both New York and New Jersey

Pooled trusts are an important asset protection tool for seniors in both New York and New Jersey, particularly for those seeking to qualify for Medicaid while preserving their income and assets. Here’s an explanation of how pooled trusts work in these states:

New York Pooled Trusts

In New York, pooled trusts are a popular option for seniors who need to qualify for Medicaid but have income or assets exceeding the eligibility limits.

Key Features:

• Established under Section 1917(D)(4)(C) of the Social Security Act
• Managed by non-profit organizations
• Allows seniors to maintain Medicaid eligibility while preserving funds for living expenses

Benefits:

• Protects access to means-tested government benefits like Medicaid and Supplemental Security Income (SSI)
• Helps seniors with Medicaid income spend-downs maintain their quality of life
• Allows individuals to use excess funds throughout their lifetime for non-covered expenses

Enrollment Process:

• Requires a completed and notarized Joinder Agreement
• Minimum opening deposit of $300 (for Community Trust II)
• Monthly fees based on deposit amount (starting at $30/month)

Eligibility:

• Available for individuals of any age, including those under 65
• Can be established by the individual with a disability, a parent, grandparent, legal guardian, or court

New Jersey Pooled Trusts

New Jersey also offers pooled trust options for seniors, though with some differences compared to New York.

Key Features:

• Established by a master trust agreement
• Individuals join by signing a joinder agreement
• Assets are invested in common, with individual subaccounts for beneficiaries

Benefits:

• Helps seniors qualify for Medicaid by making excess assets non-countable
• Provides professional trust administration at an affordable cost
• Can be used for both first-party and third-party special needs trusts

Important Considerations:

• Transfers to pooled trusts by individuals over 64 may be subject to Medicaid transfer of asset penalties in New Jersey
• Generally used for trusts with assets under $200,000

Available Options:

• PLAN/NJ (Planned Lifetime Assistance Network of NJ)
• Secured Futures

Comparison Between New York and New Jersey

1. Age Restrictions: New York allows individuals of any age to benefit from pooled trusts without penalties, while New Jersey may impose penalties for transfers by those over 64.
2. Look-back Period: New York will implement a 2.5-year look-back period for Community Medicaid in 2024, which may affect pooled trust planning. New Jersey typically has a 5-year look-back period for Medicaid eligibility.
3. Trust Retention: Many pooled trusts in New York can retain up to 50% of the trust assets upon the beneficiary’s death, with the remainder going to Medicaid payback. New Jersey’s policies may vary depending on the specific trust.
4. Availability: New York seems to have more established and widely used pooled trust options compared to New Jersey.

In both states, pooled trusts offer seniors a valuable tool for maintaining Medicaid eligibility while preserving their quality of life. However, the specific rules, benefits, and potential drawbacks can vary significantly between the two states. Seniors considering a pooled trust should consult with an elder law attorney familiar with the specific regulations in their state to ensure they make the best decision for their individual circumstances.

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