Submitted by GinaB on Sat, 02/12/2011 - 11:51
We set up a pooled trust for my mother last year. We recently submitted a receipt to the trustee for a gift my mother bought for my daughter's birthday. It was only $59 dollars but the trustee refused to cover the cost (which we paid out of our pocket). Is that right? It seems like a basic expense for grandparents, but is that the way the pooled trust has to work?
Pooled Trusts for disabled
For those who don't know, a pooled trust allows disabled people to put monthly income that exceeds the amount approved by Medicaid into the trust, with the money to be used for basic necessities and expenses that are for the sole benefit of the beneficiary, like rent, utilities, etc. The pooled trust must be managed by a non-profit organization, and that organization can refuse to pay for expenses that do not meet the narrow guidelines discussed above. In other words, pooled trusts are said to be discretionary, meaning that the beneficiary cannot force the trustee to make disbursements. Also, typically, payments for basic necessities are made directly from the trust to the vendor.
I would say that gifts to grand-kids probably are not appropriate expenditures for a pooled trust. You may want to talk to your mother's estate planning attorney to get more information about pooled trusts, especially since, as you mom gets older, she may need more help from you to manage her financial situation. And, certainly, anyone interested in setting up a pooled trust for a loved one should talk to an attorney before moving forward, as this estate planning tool is not for everyone. Good luck.