The West Virginia PACE Trust Fund is a pooled special needs trust which is a type of special needs trust.
A special needs trust (“SNT”) is a type of trust that is established to support individuals with disabilities by providing for supplemental needs that enhance the quality of life for the individual with a disability. SNTs should reflect the unique objectives, values, and needs of the beneficiary, and should focus on enabling the beneficiary to achieve as much independences as possible. In addition to enhancing the quality of life, SNTs are an important vehicle by which individuals with disabilities can stay eligible for needs-based government such as SSI or Medicaid, while still being able to address ongoing supplemental needs.
SNTs are legal documents so they should be drafted by an attorney. They also require a trustee who must manage the trust properly to prevent interference with the beneficiary’s needs-based benefits.
A pooled special needs trust (“PSNT”) has the same advantages as a SNT, but the funds for each beneficiary are held in a sub-account solely for the benefit of the beneficiary. The sub-accounts are administered by a central trustee and investment advisor.
The West Virginia PACE Trust Fund is a PSNT which maintains two pooled trust solutions:
- Third Party: Accounts established with the assets of a person other than the person with a disability; and
- First Party (also known as self-settled): Accounts established with the assets of the person with a disability
In addition, the West Virginia PACE Trust Fund serves as a trustee for non-pooled SNTs on a case-by-case basis.
The Social Security Administration indicates that pooled special needs trusts must meet the following requirements:
● The trust is established and managed by a nonprofit association.
● A separate account is maintained for each beneficiary of the trust, but, for purposes of investment and management of funds, the trust pools these accounts.
● Accounts in the trust are established solely for the benefit of the disabled individual by a family member or legal guardian of such an individual, by such an individual, or by a court.
● To the extent that amounts remaining in a self-settled account in the beneficiary’s account upon the death of the beneficiary are not retained by the trust, the trust pays to the State from the remaining amounts in the account an amount equal to the total amount of Medicaid assistance paid on behalf of the beneficiary under the State plan under this subchapter.
Advantages Of A Pooled Special Needs Trust
There are several advantages of a pooled special needs trust:
- Protects government benefits: Pooled special needs trusts offer a solution when a person with a disability owns or receives funds that could potentially cause a loss of eligibility for SSI or Medicaid.
- Provides an affordable option: Pooled special needs trusts provide professional management that might otherwise be too expensive. The fees associated with establishing and operating an individual trust may be cost-prohibitive.
- Serves those with limited assets: Pooled special needs trusts can be a good option for individuals with limited funds. Financial institutions often have a minimum threshold amount to open an individual trust account, which may be substantial.
- Ensures reliable trust management: Pooled special needs trusts are, by law, nonprofit entities. Board members and staff are responsible for trust management, meaning that if a sole trustee is no longer able to administer the trust, the organization will ensure there is no lapse in service.
- Offers investment advantages: With a larger pool of assets, pooled special needs trusts could be more able to diversify a beneficiary’s investments, reduce costs, improve returns, and protect against market volatility relative to an individual account of the same size.
- Supports court-ordered trusts: Court-ordered trusts have robust reporting requirements that take time and money to address. Pooled special needs trusts provide a streamlined, cost-effective option when it comes to court accounting.
- Offers the only option for individuals aged 65 and older: In order to establish a first-party trust, the beneficiary must be under 65 years of age. Thus, when older adults receive a court settlement or have personal assets they would like to place in a trust (most often to qualify for Medicaid), they are unable to. A pooled trust does not share this age restriction, thereby giving seniors a way to receive need-based government benefits while providing for supplemental needs.
- Ensures staff with experience and passion for serving individuals with disabilities: Unlike general trust divisions at financial institutions, which may operate a range of trusts for different types of beneficiaries, pooled special needs trusts are specifically designed to serve individuals with disabilities. The staff is committed to working with this unique population and have the relevant experience and knowledge that contribute to a high quality of service.
The West Virginia PACE Trust Fund maintains two pooled trust programs. These programs include self-settled trust and third-party trust. Each of these trust programs was developed to fill the specific needs of persons with disabilities.
Below are the current fees for The WV PACE Trust Fund. The Board of Directors of the WV PACE Trust Fund reserves the right to amend the following fees at any time.