A Pooled Trust For People With Disabilities
By William D. Kirchick
A new trust is in the offering for adult children with disabilities that will not disqualify the disabled person for SSI and other government entitlements.
The new program was brought to the attention of the Massachusetts Chapter of the National Academy of Elder Law Attorneys at its October meeting by Andrew Schiff, director of Professional Services at Jewish Family and Children's Service of Greater Boston. The following is a summary of Dr. Schiff's presentation, which describes how the trust works.
The CJP Community Trust is a pooled trust which serves adults with a wide range of disabilities including mental illness and/or physical, developmental or significant learning disabilities. It is designed for people who want to provide a full and meaningful life for disabled adult family members.
Established jointly by the Combined Jewish Philanthropies (CJP) and Jewish Family and Children's Service (JF&CS), the trust is intended to serve people of all faiths. It is one of the first if not the first such trust in New England and provides an important tool for attorneys in Massachusetts.
The CJP Community Trust was established at the urging of parents of adults with disabilities. They were concerned about the future of their children and wanted to create a mechanism that would look after their interests. The trust is designed to provide peace of mind for family members by combining asset management with indefinite care, and offering a lifetime of personal advocacy services for individuals with disabilities.
The CJP Community Trust is a "third-party" trust, meaning that it is funded by a family member, usually the parent of a disabled adult. Family members who sponsor the trust can fund it during their lifetimes or at death through a will. Trust funds are pooled for the purposed of investment, but separate accounts are kept for each beneficiary.
One of the unique aspects of a pooled trust is that trust funds are not considered in determining the beneficiary's eligibility for government entitlements. Therefore, the assets of the trust need not be "spent down" before a beneficiary can become eligible for such entitlements or to retain one's continued eligibility for entitlements.
Lifetime services provided by the trust include the following:
Regular outreach visits and telephone contacts with the beneficiary and primary service providers to confirm that the beneficiary is receiving needed services, to monitor the individual's progress, and to evaluate additional needs; Consultation on purchases or expenditures to help the beneficiary make informed decisions when utilizing his or her trust account;
Review of government programs that the beneficiary is participating in and evaluation of the beneficiary's eligibility for additional benefits; Advocacy to improve the individual's quality of life and quality of care.
Trust funds may be used flexibly for a wide variety of goods and services that enhance the beneficiary's quality of life. For example, the beneficiary can use the funds, with trustee authorization, to finance hobbies, entertainment, travel or education expenses. These expenses, under a facility of payment clause, are paid directly by the trust to the provider of services, so that in most cases funds need not be disbursed to the beneficiary.
To ensure that trust funds are used to meet the unique needs to each beneficiary, JF&CS provides a "personal advocate" who coordinates services to the beneficiary and helps the beneficiary plan for the future. The personal advocate visits the beneficiary at least four times each year, and services provided by the personal advocate continue throughout the beneficiary's lifetime, even if the funds in the individual's trust account have been exhausted.
How The Trust Is Started
JF&CS performs an initial assessment to determine the unique needs of the beneficiary. As part of this evaluation, the beneficiary's present and projected future needs are discussed with the sponsor (usually the parents of the adult child).
The sponsor may list preferences and recommendations for ways that the trust funds should be used to improve the beneficiary's quality of life and for particular services that the sponsor expects the beneficiary to need. This process provides an opportunity for family members to have input in the care planning process.
Following the assessment, the family member signs a sponsor agreement to set up the trust account. Once the sponsor agreement is accepted by the trustees, the trust account is irrevocable. A minimum deposit of $25,000, payable over three years, is required to establish a trust account. Of that amount, an initial investment of $5,000 is payable when the sponsor agreement is signed.
At any time, additional contributions, including those made through wills or insurance policies, may be made to the trust account by the sponsor in order to enhance the services to be provided.
Fees for the administration of the trust include an annual fee of 1 percent charged by CJP for overseeing and monitoring the investment of trust funds. JF&CS charges 2 percent annually for the personal advocacy services. There is also a 1-percent annual fee charged by the custodian bank.
If there are funds remaining in the trust account when the beneficiary dies, up to 50 percent of those funds may be distributed to family members or organizations designated by the sponsor.
At least 50 percent of the funds remaining in the trust account revert to CJP and JF&CS to allow them to enhance the services provided to other beneficiaries of the CJP Community Trust.
Most family members want the trust to begin during their lifetimes to ensure that the advocacy services are in place, and to allow the family to decrease their direct involvement in monitoring the needs of the beneficiary.
During times of stability, the personal advocate can monitor services and maintain the individual's quality of life. During times of crisis, intensive case management services are available to ensure that the beneficiary receives comprehensive care.
In general, those attracted to the trust want to avoid burdening other family members with the responsibilities of managing a private, individual trust. Families also want to maintain the disabled family member's eligibility for government benefits, such as SSI and Medicaid, while providing for the individual's supplemental needs.
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