Pooled trust

Where the statute uses it: Minn. Stat. § 256B.056, subd. 3b(d)

What it means

Two statutes, and Minnesota’s is a condition rather than a definition. Section 256B.056, subdivision 3b(d), says that for purposes of paragraph (e), a pooled trust means a trust established under 42 U.S.C. § 1396p(d)(4)(C), and the federal paragraph reaches “[a] trust containing the assets of an individual who is disabled” — the beneficiary’s own money, which is what makes a payback necessary at all — then sets four conditions on it: the trust is established and managed by a nonprofit association; a separate account is maintained for each beneficiary, but for purposes of investment and management of funds the trust pools these accounts; accounts are established solely for the benefit of individuals who are disabled, by a parent, grandparent or legal guardian, by such individuals, or by a court; and the payback runs only to what the nonprofit does not keep.

The payback is narrower than the first-party trust’s. Under clause (iv), “[t]o the extent that amounts remaining in the beneficiary’s account upon the death of the beneficiary are not retained by the trust,” the trust pays the State, from those remaining amounts in the account, the total medical assistance paid on the beneficiary’s behalf. Minnesota then conditions the keeping rather than capping it.

A beneficiary's interest in a pooled trust is considered an available asset unless the trust provides that upon the death of the beneficiary or termination of the trust during the beneficiary's lifetime, whichever is sooner, the department receives any amount, up to the amount of medical assistance benefits paid on behalf of the beneficiary, remaining in the beneficiary's trust account after a deduction for reasonable administrative fees and expenses, and an additional remainder amount. The retained remainder amount of the subaccount must not exceed ten percent of the account value at the time of the beneficiary's death or termination of the trust, and must only be used for the benefit of disabled individuals who have a beneficiary interest in the pooled trust.

A pooled trust that keeps more is not unlawful. Its beneficiary’s interest is simply counted as an available asset, which defeats the point of using one.

Where the word shows up

In the effective-date line under the section, which decides which accounts the ten percent reaches. The Revisor’s Note to subdivision 3b reads: “The amendment to subdivision 3b by Laws 2009, chapter 173, article 1, section 17, is effective for pooled trust accounts established on or after January 1, 2014.” An account established before that date is outside the amended subdivision, and what governs it is not decided here.

One age question is open on the face of the statutes. The transfer-penalty exception at § 1396p(c)(2)(B)(iv) speaks of a trust “established solely for the benefit of an individual under 65 years of age who is disabled” while the (d)(4)(C) pooled-trust definition requires only that accounts be “established solely for the benefit of individuals who are disabled.” Neither provision resolves the other, and this page does not resolve it either.