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First-Party d4C (Pooled) Trusts

Estate Planning Attorneys Assisting People in the Nashville Area

In general, estate planning is an important step to take to protect your assets and provide for your children or other loved ones. This process becomes even more important when establishing plans for adults or children with special needs. Different types of special needs trusts can be utilized in order to ensure that loved ones with disabilities who rely on governmental programs for their care are properly protected during their lifetime. The Nashville estate planning lawyers at Martin Heller Potempa & Sheppard, PLLC can help you determine whether a first-party d4C trust or another option is right for your family and you. We take the time to ensure that clients are informed of all of their options, as well as how each trust is structured and how it operates, so an appropriate choice is selected in line with their needs.

First-Party d4C Trusts

All special needs trusts are irrevocable, meaning that they cannot be changed by the executor once they are set up. Special needs trusts are often used so that a loved one can provide for another individual, or themselves, without affecting the beneficiary’s ability to receive governmental assistance through programs such as Medicaid, TennCare, or Supplemental Security Income (SSI). Benefits distributed by the government are done so based on a means test, which calculates a recipient’s income from various sources to determine whether they qualify for aid. Assets contained in special needs trusts do not count toward these calculations, therefore allowing a beneficiary to continue to receive necessary benefits.

Third-party special needs trusts are comprised of another party’s property, rather than the property of the disabled beneficiary whom the trust is to benefit. First-party trust assets, however, come from the named beneficiary’s own assets, such as a newly received inheritance or other type of fixed amount acquired. Furthermore, a first-party trust can either be a first-party d4C trust or established individually as a first-party d4A trust, each of which is set out under a section of federal statute 42 USC 1396p(d)(4).

Pooled trusts are unique in that they are established and overseen by a nonprofit entity, which is tasked with the responsibility of managing the assets contained therein for the benefit of those involved. Pooled trusts allow individuals to join an already established trust and therefore reduce the costs associated with setting up a new entity. Joinder agreements are signed by the beneficiary, or his or her parents or another person with decision-making authority, in order to allow the beneficiary to join a pooled trust. Assets in a pooled trust are invested and managed together, but each beneficiary has his or her own account in which money is distributed in order to pay for expenses related to the beneficiary’s care. Since one entity supervises a pooled trust, the costs of administration are shared by each member, and therefore they are considerably lower than those associated with a non-pooled trust.

Different pooled trusts are distinguishable from one another in whom they allow as members, fee schedules, asset management style, and other characteristics. An experienced trusts attorney can help determine which pooled trusts are available for you and which fit your needs. Important factors to consider include the managing nonprofit entity’s reputation, the costs of memberships and fees, and the personnel in charge of the day-to-day investments and operations.

Explore Your Options with a Knowledgeable Nashville Lawyer

Determining the right kind of trust to fit your needs can be difficult, given the multitude of options, each with its own benefits and drawbacks. Special needs trusts can be vital to make sure that an individual continues to receive the SSI or Medicaid benefits on which he or she relies. The estate planning attorneys at Martin Heller Potempa & Sheppard, PLLC are committed to ensuring that clients have comprehensive plans in place to protect them. We assist people across Williamson and Davidson Counties, including in Nashville, Franklin, Cool Springs, Brentwood, and Bellevue. If you need help establishing a first-party d4C trust, contact our office online or at 615-800-7096 to find out more about our services.