My client is over the age of 64 - What do I need to know?

We posted twice in 2012 about being able to utilize a Pooled Special Needs Trust (SNT) in Florida for individuals ranging from newborns to centenarians. 

Don't panic, we are not posting to tell you that something has changed; clients who are over the age of 64 are still able to utilize a Pooled SNT for Medicaid purposes. However, we need to also ask the question - are they receiving Supplemental Security Income (SSI) benefits?

Lately we have received an influx of inquiries regarding individuals over age 64 who are looking to maintain their SSI income, as well as their Medicaid benefits.

Unfortunately, Social Security penalizes individuals over age 64 who are receiving SSI if they fund a Pooled Trust.  The penalty is one month for every $710 put into the Pooled Trust, up to a maximum of 3 years.

In many cases this is not an acceptable penalty and other strategies for sheltering the assets need to be explored, however, there are circumstances when it still makes sense to fund a Pooled Trust even though there will be a penalty.

Often times the individual over age 64 is receiving a combination of Social Security Retirement and SSI. In these cases only, the SSI is affected by the transfer of assets to the Pooled Trust, but not the Social Security Retirement Income and Medicare medical insurance is not affected. The individual can place the assets in the pooled trust, forgo the SSI payment and then “convert” the Medicaid insurance they were receiving through SSI to the state dual eligible program, Qualified Medicare Beneficiary or QMB. They then continue to receive the benefits that the SSI derived Medicaid was providing. This is a benefit for the individual, who would otherwise lose both the SSI and Medicaid for being over the asset limit, and then have to pay Medicare premiums and copays. By using the pooled trust the individual can keep the Medicaid and also benefit from of the funds in the pooled trust.

Please feel free to contact our office with any questions.

Steve Hitchcock
Florida Bar Certified Elder Law attorney

Co-Trustee, Guardian Trust


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