As we’ve previously reported, Massachusetts has long allowed applicants for MassHealth to shelter excess assets in pooled disability or “(d)(4)(C)” trusts, the latter name referring to the federal statute that authorizes such trusts.
To qualify, the trusts must be operated by nonprofit organizations, may only be for the benefit of disabled individuals, and must provide that funds remaining upon the beneficiary’s death either remain with the nonprofit or be used to reimburse the state for payments it had made on the beneficiary’s behalf during their life. Only if funds remain after the state reimbursement and set aside for the nonprofit may they be distributed to family members or other heirs.
These pooled trusts have been important safe harbors for MassHealth beneficiaries given the $2,000 limit on assets for many types of coverage. They permit payments for services MassHealth doesn’t cover and allow beneficiaries to set aside funds to pay to maintain homes. In some instances, they permit beneficiaries to stay in their homes through a combination of MassHealth coverage and private payments to caregivers from their pooled trust accounts.
Baker’s Attack on Pooled Trusts
Despite these important benefits, Governor Charlie Baker’s administration had pooled trusts in its crosshairs and passed regulations to limit their availability to MassHealth beneficiaries under the age of 65. The regulations were delayed by Covid-19 but, in perhaps his final act as governor, the regulation went into effect at the beginning of 2024. To make things somewhat confusing, it’s not that people over the age of 65 couldn’t use pooled disability trusts, just that transfers into such trusts after age 65 were penalized like other transfers of assets not permitted under the MassHealth rules.
The Legislature Acts
I used the past tense in the last sentence because, fortunately, the Massachusetts legislature recognized the wisdom of permitting all MassHealth beneficiaries access to pooled disability trusts. It passed legislation repealing the Baker regulations which Governor Maura Healey signed on September 6th. The effective date of the new law was December 6th.
This change reflects the work of members of the Massachusetts chapter of the National Academy of Elder Law Attorneys and other advocates. What remains a bit unclear is how MassHealth will treat transfers to pooled trusts by individuals aged 65 or older from January to December 6th 2024, if there were any.
To find a pooled trust in Massachusetts (or any other state), you can look at the Pooled Trust Director on the website of the Academy of Special Needs Planners: https://specialneedsanswers.com/pooled-trust.