A first party trust is established when an individual receives a lump-sum payment from an insurance settlement, a Social Security back payment or an inheritance that was not previously directed to a Special Needs Trust. This type of trust allows an individual to retain this asset without jeopardizing their Medicaid benefit. However, upon the passing of the Trust Participant, Medicaid will seek reimbursement for any services provided during the life of the Participant. Individuals can designate that any balance in the Trust upon the passing of the Participant be given to a beneficiary or charity and this is completed after Medicaid received its reimbursement. Alternatively, an individual can opt to leave any remaining funds in the Trust for the benefit of others also participating in the Trust.

A third party trust is established when a family member or person other than the individual directs funds to the Trust specifically by-passing the individual. This can be funded with cash, insurance policy, annuity or other vehicle. In these cases, the granting party can determine how any residual funds are handled – whether to a named beneficiary or charity – as Medicaid cannot file a claim against these funds. The balance could also be left in the Trust for the benefit of other Participants.

Several different groups:

• People who “spend down” to qualify for Medicaid. For those individuals, the dollars could be put into the trust and it then becomes exempt, which means it is not counted by Medicaid.
• People who have family members who want to set aside money for the enhancement of their life in a safe manner so as not to interfere with existing services and supports.
• Families caring for a child with a developmental disability can use the trust for estate planning purposes. They can put money in the trust and use it for their child’s future expenses. These resources will not prevent the child from qualifying for Medicaid.
• People over the age of 65 are also eligible for Pooled Special Needs Trusts.

No.

No.

Yes. The Rhode Island Pooled Trust does not require that you be a RI resident to participate.
If you choose to relocate and want your Trust account managed by an entity closer to your new home, arrangements can be made to transfer the Trust to a new Trustee(s)

Due to complications with maintenance, upkeep and unforeseen costs, the Pooled Trust does not generally accept real estate in an individual’s account. There are several other options available to consider in these cases.

Each year, the Pooled Trust will issue statements detailing whether any of your gains are taxable. Participants are required to provide that information when filing their taxes.