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Pooled Special Needs Trust: Leveraging the Power of Community

by Michelle K. Wolf

June 6, 2014 | 4:47 pm

It’s not unusual for parents of children with special needs to lose sleep worrying about what will happen to their child when the parents aren’t around. How can they ensure that their adult child will be safe and happy? Will their adult child have the support and resources they need to live a full life?

A key financial tool to set aside funding for relatives with significant physical, mental, cognitive, and developmental disabilities without jeopardizing vital government benefits is an individual Special Needs Trust. But for many middle-class parents, the cost of setting up this type of Trust with a private attorney and paying yearly costs can be out of reach. Plus, there is the issue of who to appoint as the Trustee after the parents have gone on to their Great Reward in the Sky (which I sure hope involves dark chocolate and back massages).

An alternative to the individual route is a Pooled Special Needs Trust, which “pools” the resources of many beneficiaries for investment purposes, and those resources are required by federal law to be managed by a non-profit association, which becomes the Trustee for all beneficiaries enrolled. Money is typically spent down slowly, averaging an industry standard of 4% to ensure that funding is available over the beneficiary's lifetime.

All funds from the Pooled Special Needs are paid directly to a third-party, never touching the social security account of the beneficiary. Funds can be used to pay for the needs of the beneficiary outside of rent and food, such as out-of-pocket medical expenses, care management, travel/recreation and purchasing a car, computer or wheelchair. Hundreds of these Trusts exist nationally, with nine operating in California, but none are headquartered in Los Angeles County, and none in California have a Jewish perspective.

With funding from the Jewish Federation of Los Angeles, Bet Tzedek is conducting a Community Needs Assessment about how a Pooled Special Needs Trust can provide a safe and legal way of setting aside money for a loved one with a disability and is researching the level of interest in Los Angeles in establishing a local Pooled Special Needs Trust that would be focused on the Jewish community.

If you are interested in learning more this Pooled Special Needs Trust project, please join me next Wednesday, June 11th at 7:30 pm at B’nai David Judea, 8906 Pico Blvd, Los Angeles, 90035. This event is co-sponsored with JFS/Chaverim and ETTA.

But, please, please RSVP to let us know you are coming. Just send an email to LAPooledTrust@gmail.com or leave a voicemail message at (323) 549-5835.

Together, we can build a stronger community! And also get some extra sleep…

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