My client no longer needs Medicaid or SSI, so can they terminate their trust?

We are frequently asked “What happens with my Pooled Trust Account if I no longer need SSI or Medicaid?”  First we would say “Congratulations!” You are now in situation where you don’t have to worry about the strict limitations Social Security places on you or the limited services Medicaid provides to you.  However, we cannot just terminate the Pooled Trust Account and give a beneficiary the remaining balance.  Federal policy is very clear that if the Pooled Trust Account is terminated during the lifetime of the beneficiary, the State Medicaid lien(s) MUST BE PAID BACK IN FULL before a beneficiary can get his or her money back.  See the POMS on Early Termination at SI 01120.199.  Therefore, the account continues.  However, now we have more flexibility in the administration.  If the beneficiary is no longer receiving SSI then we do not have “in-kind support and maintenance” concerns or income limits for the beneficiary.  If the beneficiary is no longer eligible for Medicaid we can treat the Pooled Trust Account as more of a general support trust and continue to pay for goods or services for the beneficiary or, in some instances, make payments directly to the beneficiary.  There is likely not a good reason to go ahead and pay off the Medicaid trust lien rather than continue to have those funds remain for the beneficiary to use during his or her life.  We can request the Medicaid trust lien amount and work with the beneficiary and his or her legal advisor to determine if terminating the account and paying off the lien is in the beneficiary’s best interest.
Location: Clearwater, FL, USA

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