A discretionary, third-party trust, the Master Trust is often established by a parent or grandparent to leave assets to a child with a disability (known as the Beneficiary) and is used in conjunction with an overall estate or future planning strategy. Funds in a Master Trust account are not owned by the Beneficiary, but come from sources such as an inheritance, will, life insurance policy, or gift and are deposited directly into the trust account to be used to pay for the Beneficiary’s supplemental services. Even though it is often done by a parent(s), anyone (relative, friend, or stranger) can create a Master Trust for the benefit of a person with a disability.
Pooled Medicaid Payback Trust
This trust account allows an individual with a disability (known as the Beneficiary) to set aside his or her own money to use for supplemental services and helps safeguard his or her eligibility for government benefits. Examples of funding sources include an inheritance, gift, personal injury settlement, back payments from Social Security, or even lottery winnings. The initial deposit must be $5,000 or more.
Roll-in Pooled Medicaid Payback Trust
This trust account is the same as the Pooled Medicaid Payback Trust except that the initial deposit can be less that $5,000. The trust account allows an individual with a disability to gradually save small amounts of his or her own money in the trust account and safeguard their eligibility for means-tested government benefits.
Supplemental services are those items or services that will not be paid for by insurance or a government program, but supplement and can enhance the quality of life (dignity, joy, or optimism) of an individual with a disability. Examples include:
- Cable TV
- Internet service
- Magazine subscriptions
- Vacations, including the cost incurred by a companion
- Experimental or elective surgery
- Advocacy, including attorney fees
- Items such as special therapies or adaptive equipment denied by private insurance, Medicare, Medicaid and other government programs
Need to Know More?
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Requesting Distributions from a Trust Account:Click here for more information.