Advantages and Disadvantages of Pooled Pay-Back Trusts

Pooled Pay-back Trust:

Advantages of a Pooled Pay-Back Trust:

Allows an individual to shelter assets and qualify for services provided by the:

  • Illinois Department of Human Services
  • Medicaid, Food Stamps, In-Home Services, Nursing Home
  • Illinois Department of Aging, In-Home and Adult Day Services
  • Allows individuals to receive services at Medicaid rates instead of "spending down" assets at private rates.
  • Allows individuals to supplement costs of care not covered by Medicare, Medicaid, or other government programs.
  • Allows individuals to provide an inheritance for their loved ones from monies remaining in the Trust after the cost of their care has been paid-back.

Disadvantages of a Pooled Pay-Back Trust:

  • Funds are not readily available to the grantor/beneficiary; payments to providers must be requested and justified as reasonable and necessary.
  • Fees and Medicaid costs must be paid before remaining assets are distributed to those named Remainder Beneficiaries.

Why is it called a Pooled Trust?

  • Individual assets are pooled with the assets of others to allow the Trustee to maximize investments and maintain the Trust.

Why is it called a Pay-Back Trust?

  • The trust must pay back the cost of care* before any funds are paid to the heirs or loved ones named Remainder Beneficiaries. (*Costs are paid at the Medicaid rate, which is much lower then the private pay rates of Nursing Home Care.)

Who Should Consider a Pooled Pay-Back Trust?

  • Elderly or Disabled individuals who wish to qualify for Medicaid and other government benefits in order to afford the costs of long term care, such as:
  1.  In-Home Care
  2.  Adult Day Services
  3.  Supportive Living Facilities
  4.  Nursing Home Care
  • Elderly or Disabled individuals at risk of losing Medicaid and other government benefits due to:
  1. An inheritance, or
  2. A settlement from a lawsuit (Personal Injury, Medical Malpractice, etc..).