Pooled income trusts are a viable way to gain and maintain Medicaid eligibility for many seniors, people with disabilities, and others. But there are some misconceptions surrounding these trusts, which are valuable tools for those in need of long-term care when their income exceeds Medicaid’s limits.

Here are some common misconceptions and corresponding facts about the pooled trust to help you gain a better understanding of what it can do for you or a loved one.

#1 Misconception: Pooled trusts are only for rich people.
The pooled trust is not solely for use by wealthy people. Quite to the contrary, these trusts are designed to shelter monthly income that exceeds the exempt monthly income set by Medicaid programs your “spend down” amount), which can vary by state and does change annually. In 2025, the exempt amount of monthly income for an individual receiving Medicaid home care is $1,800 and for a couple receiving Medicaid home care is $2,433. By putting excess income in this type of trust, you avoid having to spend it down while being able to pay other approved living expenses.

#2 Misconception: Pooled trusts are solely for the elderly.
Seniors over 65 are not the only ones who can join a pooled trust. Those needing assistance with income management and eligibility for government assistance can include disabled adults and others with a disability as defined by Social Security law.

#3 Misconception: Pooled trusts are permanent.
A pooled trust can be canceled at any time; therefore, it is not permanent. Participation timelines can vary according to an individual’s needs. For example, joining the trust may be temporary when it is needed to qualify for Medicaid benefits due to income limits. If monthly income is reduced, the trust may no longer be needed and will serve as a temporary solution.

However, most times, a pooled trust is a long-term solution for many who join for medical and home care government assistance.

#4 Misconception: You lose control of income when joining a pooled trust.
This may be one of the biggest misconceptions and can stop many from pursuing this important financial tool. Individuals who participate can and do decide how to manage funds disbursement needs by working with the trust company to pay approved monthly living expenses, like rent, electricity, cable, etc.

#5 Misconception: Pooled trusts just write your checks.
The pooled trust does make payments on your behalf but also ensures that your spending follows Medicaid guidelines and regulations. The purpose of joining a pooled income trust is to qualify and maintain Medicaid home care benefits. Funds are deposited into the pooled trust monthly so that this trust can pay your living expenses you may not otherwise be able to afford due to your “spend down” amount required by Medicaid.

#6 Misconception: Pooled trusts are all the same.
Pooled trusts are NOT all the same. Quality of service and costs vary. Each trust account is created and designed to fit the specific needs of the member. Pooled trusts are managed by nonprofit organizations. Each trust beneficiary has a “trustee” assigned to his/her case, who will work with you through the enrollment process and the life of the trust membership to ensure your needs are met.

#7 Misconception: A pooled trust is expensive.
When considering the cost of any trust, it’s wise to consider the benefits that can be gained, such as valuable government benefits related to long-term home care needs. Costs associated with a pooled trust may include a one-time enrollment fee, monthly administrative fee (percentage of monthly Medicaid surplus deposit), and an annual renewal fee. These fees can vary depending on the pooled trust; minimum and maximum amounts may apply.

#8 Misconception: Everyone has the same plan.
Pooled trusts do NOT employ a one-size-fits-all method. Each trust is customized to tailor each member’s unique goals for a personalized approach aligning with health and financial regulations. For example, disbursements are made according to each individual’s specific needs, and contributions made to the trust vary from one member to the next.

#9 Misconception: Pooled trusts are too complex and complicated.
Although a pooled trust may seem confusing or complex, the nonprofit organizations that manage the trust have extensive experience in these types of trust and will handle all the details. They will ensure that you are following Medicaid requirements and guidelines, therefore eliminating the need for you to navigate these complicated regulations on your own.

Making informed decisions about what is best for you or a loved one requires transparency and a clear separation of facts from fiction. Securing Medicaid eligibility through a pooled trust can ensure you or a loved one receives needed long-term home care benefits.

In such cases, it is wise to select a professional and reputable trust organization that can do the heavy lifting for you. If you have any questions or want to learn more about how this type of trust can work for you, contact the elder law attorneys at Kommer Bave & Ciccone LLP for more information.

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