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Frequently Asked Questions

General Information

  • What types of trusts are administered by CCT?

    • First-Party Pooled Special Needs Trust – A trust funded by the individual with special needs with his or her own funds from a personal injury settlement, workers’ compensation award, inheritance, savings, Social Security back payment or other source. For beneficiaries receiving Medicaid, this type of trust is sometimes referred to as a Medicaid payback trust.
    • Third-Party Pooled Special Needs Trust – A trust funded by a third party, such as a family member or friend, which can be coordinated with an estate plan, life insurance policy, investments, retirement account, employee benefit or other assets.
    • Settlement Preservation Pooled Trust – A trust funded by a settlement for vulnerable individuals and minors, established with an individual’s own funds.
    • Military Survivor Benefit Plan First-Party Pooled Special Needs Trust – A trust funded with payments from a military member or retiree’s survivor benefit plan for the benefit of a dependent child who has special needs.

    The primary difference in these trusts is the source of the assets funding the trust. All trusts are administered by CCT in a similar manner. Many beneficiaries have both a third-party and first-party trust with CCT. For Medicaid recipients, a major difference between a first-party and third-party trust is how the remainder is handled when the Beneficiary who received Medicaid passes away.


  • Who can have a trust?

    Nature of Disability


    CCT provides trust administration services for individuals who have a disability. According to the Social Security Administration’s (SSA), adults are considered disabled if they are unable to engage in gainful activity by reason of any medically determinable physical or mental impairment. Children are considered disabled if they have a medically determinable physical or mental impairment that causes marked and severe functional limitations.


    CCT requires that a beneficiary have a well-documented disability but does not require that the beneficiary have an official disability determination by the SSA.


    Age of Beneficiary


    CCT’s First-Party Pooled Special Needs Trust is available to beneficiaries of any age. For an individual who is 65 years of age and older and receives or plans to apply for Medicaid Long Term Care, the eligibility requirements for a first-party trust vary from state to state. Please contact CCT for more information.

  • What can a trust pay for?

    The trust can be used in many ways to enrich the quality of life of the beneficiary. The trust can pay for clothing, computer equipment, furniture, dental care, eye exams and eyeglasses, vocational training or other educational expenses, and transportation.


    The trust must be used for the sole benefit of the beneficiary.


    For a beneficiary who receives SSI and/or Medicaid, CCT follows the rules of government agencies for pooled special needs trust organizations. Disbursements typically are not approved that would duplicate what benefit programs are providing, such as food and shelter for SSI recipients, as these disbursements would affect benefits.

  • How are disbursements handled?

    CCT follows the provisions of the Master Trust Agreements when administering trusts. The staff is knowledgeable about the rules governing Medicaid and SSI which allows CCT to protect eligibility for means-tested government benefits.


    Disbursement requests are reviewed by an in-house Disbursement Committee comprised of Client Service Coordinators, the Executive Director and General Counsel. The Board of Directors Disbursement Committee comprised of trust and estate attorneys with expertise in special needs planning is consulted as needed.


    For clients receiving SSI and/or Medicaid, checks are made payable to a vendor, a retail merchant, an advocate who has purchased goods and services on behalf of the beneficiary, a credit card company for goods and services purchased on behalf of the beneficiary, or funds can be added to a pre-paid True Link Visa credit card. Cash is not disbursed directly to the beneficiary.

  • How are the trust funds managed and invested? What does "pooled trust" mean?

    CCT serves as trust administrator and is responsible for management of each sub-account. Capital First Trust Company, Inc. (Capital First) serves as trustee and has fiduciary responsibility to the trust. True Link Financial[1] (True Link)  serves as investment advisor and recordkeeper for the trust.


    Cash from all sub-accounts are then grouped, or “pooled” together, and are invested. Pooling of funds reduces administrative fees and increases the principal for investment purposes. Earnings from the investments are applied to each beneficiary’s sub-account based on the beneficiary’s share of the total principal amount.


    Financial records are maintained for each sub-account that reflect all activity in the account. The advocate of the sub-account (named in the Joinder Agreement) has the option of reviewing account information online or receiving mailed quarterly statements.


    [1] Investment Advisory services are offered by True Link Financial Advisors, LLC, a registered investment adviser affiliated with True Link Financial, Inc.


  • In what states are trusts from CCT available?

    CCT is a nonprofit organization operating nationally that provides trust administration services for individuals with special needs.



  • Who can request disbursements?

    Advocates named on the Joinder Agreement have the responsibility of requesting disbursements, receiving financial statements, and communicating with CCT about the needs of the beneficiary. The advocate(s) can be the beneficiary, a parent, guardian, conservator, power of attorney, family member, case manager, or friend and/or someone who is trusted and familiar with the needs of the beneficiary.



  • How do I share my vision for the trust and other helpful information with CCT?

    The advocate(s) will be asked to complete the following forms that can be updated as needed:


    Budget Estimated Expenses to be Paid by the Trust: This form will provide an estimate of how long the trust will last if disbursements stay within that budget over a planned period of time. Looking into the future from the context of a yearly budget will help preserve the trust.

    Objectives for the First-Party Pooled Special Needs Trust: This form is helpful for CCT to understand how best to meet the needs of the beneficiary. It allows the advocate to describe goals for the trust and areas in which disbursements are anticipated.

  • What tax information is provided?

    First-Party Pooled Special Needs Trust: The advocate will receive a Grantor Letter, issued to the beneficiary as required by IRS regulations. This form is for tax preparation purposes and reports a participant’s share of the trust’s income, credits and deductions in a given calendar year. Advocates are asked to consult a tax professional with questions.


    Third-Party Pooled Special Needs Trust: The advocate will receive a K-1 form, issued to the beneficiary as required by IRS regulations. This form is for tax preparation purposes and reports a participant’s share of the trust’s income, credits and deductions in a given calendar year. Advocates are asked to consult a tax professional with questions.

First-Party Pooled Special Needs Trust Information

  • What is the First-Party Pooled Special Needs Trust?

    The federal Omnibus Budget Reconciliation Act of 1993, known as OBRA, is a federal law that defines how one can have a special needs trust and still qualify for public benefits, and how the trust can be established. OBRA allows people with special needs to place their own money into an irrevocable pooled special needs trust and still be eligible for SSI and Medicaid. These trusts, sometimes referred to as OBRA trusts, self-settled special needs trusts, or Medicaid payback trusts, can be set up to prevent personal funds from being counted as the person’s resources, so the individual’s eligibility for SSI and Medicaid services is not jeopardized.  The pooled trust program is managed by a nonprofit organization such as CCT.


    CCT’s First-Party Pooled Special Needs Trust is established by a grantor who can be the beneficiary, parent, grandparent, Guardian, or the Court.  A power of attorney can be used to establish the sub-account if it meets certain requirements.

  • What is the First-Party Pooled Special Needs Trust with Medicare Set-Aside Account?

    Following settlement of a worker’s compensation or liability lawsuit, federal law prohibits Medicare from paying for injury-related medical expenses or medication that an employer or third party is primarily responsible to pay. To ensure Medicare does not pay a medical expense or medication when it is not primarily responsible, federal regulations require that a portion of settlement funds be “set-aside” in an account to pay for future injury-related medical expenses and/or medications known as a Medicare Set-Aside.



  • Are First-Party Pooled Special Needs Trusts irrevocable?

    By law, First-Party Pooled Special Needs Trust must be irrevocable.



  • How can the trust be funded?

    The First-Party Pooled Special Needs Trust is funded with the beneficiary’s own funds from a personal injury settlement, workers’ compensation award, inheritance, savings, Social Security back payment, or other source.


    Checks can be made payable to CCT First-Party PSNT f/b/o (Name of Beneficiary) or Commonwealth Community Trust First-Party Pooled Special Needs Trust for the benefit of (Name of Beneficiary) for deposit to the beneficiary’s sub-account at any time. Real estate or other non-cash assets are not accepted, since the funds must be pooled for investment purposes.

  • What is the Military Survivor Benefit Plan Pooled Special Needs Trust?

    With the passage of the National Defense Authorization Act of 2015, military members and retirees can direct payments from survivor benefit plans to a special needs trust for the benefit of a dependent child who has special needs. By law, the Military Survivor Benefit Plan Pooled Special Needs Trust must be set up as a First-Party Special Needs Trust with the Medicaid payback provision.



  • What are the fees to establish the First-Party Pooled Special Needs Trust?

    There is an initial one-time Enrollment Fee, and ongoing administrative fees.



  • What happens to the remainder when the beneficiary passes away?

    The grantor can designate primary and contingent successor beneficiaries in the Joinder Agreement. The grantor can designate one person, several people, or a nonprofit organization like CCT, to receive some or all of the remainder funds. Successor and contingent beneficiaries cannot be changed once the sub-account is funded.


    For a Beneficiary who has never received Medicaid benefits:

    After administrative fees are deducted, the remaining funds are distributed to the successor or contingent beneficiaries per the Joinder Agreement.


    For a Beneficiary who received Medicaid benefits:

    The First-Party Pooled Special Needs Trust is a Medicaid payback trust for beneficiaries who receive Medicaid. Upon the death of the beneficiary, there are specific rules for what happens to the remainder. These rules may vary from state-to-state.


    In general, the Medicaid office for each state in which the beneficiary received Medicaid benefits is notified upon the death of the beneficiary.  CCT requests information regarding the total amount of claims (funds that Medicaid has spent) that is owed to Medicaid on behalf of the beneficiary.


    The following scenarios help to explain CCT’s policy for the remainder of the First-Party Pooled Special Needs Trust upon the death of the beneficiary. CCT’s policy is followed to the extent that it complies with each state’s Medicaid policy:


    When Medicaid is owed less than the amount remaining in the trust:


    The successor beneficiaries, per the Joinder Agreement, will receive the balance after Medicaid is reimbursed and administrative fees are deducted.  For example, if there is $50,000 remaining in the trust, and Medicaid is owed $30,000, Medicaid will be reimbursed $30,000 and the successor beneficiary(s) will receive $20,000.


    When Medicaid is owed more than the amount remaining in the trust:


    The remainder will be retained by CCT to support the mission of CCT, which includes the Charitable Fund Award.  For example, if there is $50,000 remaining and Medicaid is owed $60,000, CCT will retain $50,000.


    IMPORTANT! Pre-need funeral and burial arrangements for the beneficiary should be made and paid for prior to the death of the beneficiary as disbursements will not be approved after the beneficiary has passed away.


    It is also important that CCT is notified by the grantor or advocate at the time of death of the beneficiary. CCT is not notified by any other agency. A copy of the death certificate is requested when it becomes available.

Supplemental Security Income (SSI) and Medicaid Information

  • What is the connection between public benefits and countable resources (assets and income)?

    Many individuals with special needs receive SSI, a federal means-tested program for people who are impoverished and disabled. SSI is administered by the Social Security Administration and provides a monthly monetary allowance that pays for food and shelter. Many people who receive SSI are eligible for Medicaid. Medicaid pays the cost of health services for people with special needs who demonstrate a financial need. Adults are eligible for SSI if they have a disability that prevents them from working and earning a self-sufficient wage, and they have less than $2,000 in countable resources. Children, who are minors, are eligible for SSI if they have “marked and severe functional limitations” from a physical or mental condition and financial criteria. A parent’s income is imputed to the minor child.


    In order to be eligible for SSI and Medicaid, a person cannot have more than $2,000 in countable resources.


    Establishing the First-Party Pooled Special Needs Trust will preserve funds that can be used for the benefit of an individual with special needs, without jeopardizing SSI and Medicaid, as the funds in these trusts are not counted as income or resources.

  • What must be reported to government agencies for SSI and Medicaid recipients by the beneficiary or his or her representative?

    It is the responsibility of the beneficiary or his/her representative to report the following:


    • A change in the beneficiary’s living arrangement.


    • A change in the beneficiary’s income (including the receipt of any direct income or in-kind support and maintenance from the trust, but not distributions that are “not income”).


    • A change in any countable resources.


    • New eligibility for other public benefits.


    • Substantial medical improvements that may result in the beneficiary no longer being considered disabled.


    • A change in the beneficiary’s marital status.


    • Admission to or discharge from any health facility or public facility, such as a hospital or nursing home.


    • Any intended trip outside the United States.


    The report should be in writing to the Social Security Administration and include the beneficiary’s name and Social Security number, the name of the person making the report, and a description of the event reported and the date it happened. The report is due within 10 days after the end of the month in which the event occurred.

  • What services are not provided by public benefit programs? 

    Usually people who receive SSI have meager funds available for basic living expenses. SSI pays for food and shelter related expenses and allows a small amount for a personal care allowance. A trust can pay for supplemental needs that include eye and dental care, eyeglasses, hearing aids, clothing and other items and services that would enhance the Beneficiary’s quality of life.



  • What information is reported by CCT to government agencies for clients receiving SSI and Medicaid?

    The following reports are provided to the appropriate public agencies for beneficiaries who receive SSI and/or Medicaid:


    • The establishment of the trust at the time of enrollment.


    • When requested by a public agency, CCT will provide a copy of the Joinder Agreement, any court orders, and financial statements that detail deposits and disbursements.


    CCT will provide notification to the state Medicaid office, upon the death of the Beneficiary, for clients who have the First-Party Pooled Special Needs Trust and receive Medicaid.


    Disbursements that would impact benefits, usually for an emergency, and with the advocate’s written acknowledgement.

Third-Party Pooled Special Needs Trust Information

  • What is the Third-Party Pooled Special Needs Trust?

    A third-party trust is a general term for a special needs trust that a family member or friend (the “third-party”) establishes for the benefit of an individual with special needs. All deposits must be in cash and must be third-party assets, typically belonging to the grantor, family member, or friend at the time of deposit. None of the funding assets may belong to the beneficiary.


    CCT’s Third-Party Pooled Special Needs Trust is administered by CCT, a nonprofit organization.

  • How can the trust be funded?

    The most common way to fund the Third-Party Pooled Special Needs Trust is through the grantor’s will, estate plan, life insurance policy or employee benefit plan. The trust may also be funded by a gift, bequest, or inheritance directed to the trust by another family member or friend.


    Checks can be made payable to CCT Third-Party PSNT f/b/o (Name of Beneficiary) or Commonwealth Community Trust Third-Party Pooled Special Needs Trust for the benefit of (Name of Beneficiary) for deposit to the beneficiary’s sub-account at any time. Real estate or other non-cash assets are not accepted, since the funds must be pooled for investment purposes.


    It is helpful to consult with an estate planning attorney who is familiar with special needs trusts when writing your estate plan or will. CCT can provide the Master Trust Agreement and suggested language (also available on the CCT website) and can assist with questions that you or your attorney may have.

  • What happens to the remainder when the beneficiary passes away?

    The Grantor can designate primary and contingent successor beneficiaries in the Joinder Agreement. For participants of the Third-Party Pooled Special Needs Trust, the successor beneficiaries will receive the remainder of funds in the trust sub-account upon the death of the beneficiary. The grantor can designate one person, several people or a nonprofit organization like CCT to receive a percentage or all of the remainder funds. This information can be updated by the grantor prior to funding by completing the Amendment to the Third-Party Pooled Special Needs Trust Joinder Agreement form. The trust, including the successor beneficiary, is irrevocable after funding.


    Upon the death of the beneficiary, distributions for administrative and termination fees are allowed. After the administrative fees are disbursed, the remaining funds are distributed to the individual(s) designated in the Joinder Agreement.


    IMPORTANT! Pre-need funeral and burial arrangements for the beneficiary should be made and paid for in advance, as disbursements will not be approved once the beneficiary has passed away.

  • Why should I consider a Third-Party Pooled Special Needs Trust?

    Family members or others can set up a Third-Party Pooled Special Needs Trust that will provide financial support for a loved one with special needs.


    In the case of an individual who receives public benefits such as Supplemental Security Income (SSI) and/or Medicaid, an inheritance left directly to the beneficiary may jeopardize eligibility for public benefits. See What is the connection between public benefits and countable resources (assets and income)? section of this document. The same funds, if directed to a Third-Party Pooled Special Needs Trust for the benefit of the beneficiary, will not be counted as a resource or income for the purpose of maintaining SSI and Medicaid eligibility.


    In addition, the grantor may have concerns about the beneficiary’s ability to manage his or her own funds. The Third-Party Pooled Special Needs Trust eases this anxiety by providing fiscal oversight to ensure that funds left for the beneficiary meet their intended goals.


  • What are the fees to establish the Third-Party Pooled Special Needs Trust?

    There is a one-time Enrollment Fee that is due at the time the Joinder Agreement is completed and received by CCT.


    If a grantor does not submit a completed Joinder Agreement and Enrollment Fee prior to passing away, the Enrollment Fee is higher. Trusts that are established in this manner are much more complex to administer due to the lack of information about the beneficiary and the grantor’s intentions for the trust.

  • Can a family member or friend other than the grantor make a contribution to the Third-Party Pooled Special Needs Trust?

    Yes, the trust can receive gifts, bequests, and inheritances from relatives, friends or others who choose to direct funds to the beneficiary’s PSNT. This allows for an efficient and cost-effective way for family members to avoid having to prepare separate special needs trusts, since anyone can name the beneficiary’s trust with CCT in their estate plan or will. It is important that family members be notified that a Third-Party Pooled Special Needs Trust has been established and that funds should be directed to the trust with CCT and not directed to the individual.


    Once the Third-Party Pooled Special Needs Trust is set up, checks can be made payable to CCT Third-Party PSNT f/b/o (Name of Beneficiary) or Commonwealth Community Trust Third-Party Pooled Special Needs Trust for the benefit of (Name of Beneficiary) and sent to CCT for deposit into the beneficiary’s account. The beneficiary’s name, and account number if available, should be included on the check to ensure funds are deposited to the correct account.

  • Is the Third-Party Pooled Special Needs Trust revocable?

    The trust is revocable until funded. After funding, the trust and all provisions of the Joinder Agreement are irrevocable.



Still Have Questions?

If you do not find the answer to your question here, let us know! We are always looking to improve our resources to better assist you.


The information provided in the Frequently Asked Questions is not intended to be legal advice, but merely conveys general information related to legal issues commonly encountered. The reader is encouraged to consult with an attorney who is knowledgeable about estate planning. Contact CCT if you would like a referral to an attorney.

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