Best Practices in Pooled Trust Programs


* Rick Berkobien, MSW

Statement of Problem and Background
Conceptual/Theoretical Model
Research Questions or Hypotheses
Methodology
Progress to Date
Key Findings and Potential Implications


Statement of Problem and Background



Pooled trusts, usually operated by non-profit organizations, are used by families and others to provide financial care for the person with MR or other disability. In lieu of establishing an individual trust account for a son or daughter, families "pool" resources with other families in one trust. The organization then manages and invests the trust as a single fund which reduces administrative fees as there is only one account, and increases the total amount of principal for investments. Beneficiaries then receive earnings based on their share of the principal. Some organizations also operate a type of trust which an eligible individual with a disability can fund with his or her personal money. Pooled trusts allow families with smaller amounts of money to use trusts (in lieu of bank trusts that usually require larger accounts) and are usually managed by an organization that is operated by or affiliated with a disability group.

Pooled trusts are especially beneficial to people with MR receiving services through Supplemental Security Income (SSI) and Medicaid. SSI and Medicaid are usually means-tested, meaning the person's assets cannot exceed a certain amount, and the person must usually contribute toward his or her cost of care with the proceeds from any earnings, SSI or Social Security Disability Insurance checks. Many of these individuals are then left with only a small personal care allowance (as low as $30 per month in many states) for clothing, toiletries and related items, that parents often subsidize because the amount is grossly insufficient. If the parents then die and leave their son or daughter an inheritance to help cover these costs, the inheritance will likely be considered an asset, and the heir will be charged a full "cost-of-care" charge, which would quickly deplete this inheritance meant as supplemental funding. Pooled trusts usually do not impact the individual's SSI and Medicaid in this manner as the trust restricts distributions to certain limits or usage. This helps to ensure that an inheritance to provide supplemental income will not be lost (Berkobien,Varnet, & Davis, 2002).
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Conceptual/Theoretical Model



The project used a community-based model of aging in-place for families of persons with intellectual and developmental disabilities.

Research Questions or Hypotheses

The aims of this project are to increase understanding of quality practices in pooled trust programs; to aid families in using trust programs or alternatives; and, to increase the family's ability to develop effective future plans that address financial, legal and service/support areas.

The study has two research questions.
1) What information do families and individuals need to make an informed choice about using pooled trust programs?
2) How are pooled trust programs organized and what services do they offer? What are the experiences and levels of satisfaction of families who have used pooled trust programs?


Methodology



The Arc conducted three studies to answer the research questions.

Study 1. A forum of trust program representatives, parents who have developed a financial plans and legal/financial planning experts was convened to begin the process of identifying best practices for pooled trusts. Through a consensus process, participants identified information, practices and strategies to increase the family's knowledge and skills in using trust program services (or alternatives) and program quality (e.g., advantages/disadvantages of a pooled trust; strategies to determine adequate trust amount; questions and methods families can use to identify program quality). Forum outcomes were summarized in a draft document later used to produce a publication for families and advocates, Pooled Trusts Programs for People with Disabilities: A Guide for Families.

Study 2. Trust programs were surveyed by mail to elicit the following: structure of program (separately incorporated, administered by another organization); governance; quality assurance mechanisms (internal, external evaluations); populations served (people with MR only, cross-disability); geographic locale served; service monitoring; state-specific regulations that impact program; type(s) of trusts provided; investment minimums, fee structure; disposition of trust remainder upon beneficiaries' death; and, steps undertaken in developing their program. This information was used for background in producing the pooled trust document.

Study 3. The Arc conducted a survey of families who have used pooled trust programs or conducted other financial planning to determine their experiences and satisfaction with these programs or other planning methods used. Questions included: type of financial plan used (pooled trust, individual bank trust); reason(s) for choosing plan; obstacles to planning (lack of information, lack of resources) resources; satisfaction level with program/plan; methods or strategies used or helpful in making decisions (training, materials, professional's assistance); family members participating in decision-making (including relative with disability); and demographic information. The survey was disseminated through The Arc's newspaper to its members.


Progress to Date



All studies are now complete. The document developed from study 1, Pooled Trusts Programs for People with Disabilities: A Guide for Families, is published in hard copy and on The Arc's web site. It is also being disseminated by the RRTC's Clearinghouse. The information from study 2 provided valuable additional information used in developing the pooled trust guide. The PI also decided to do a search for additional pooled trust programs and identified 9 new ones and 2 that ceased to exist. The Internet was searched and all identified programs were contacted to assist in the search and to verify their existence. Thirty-five are listed in the pooled trust guide.

Study 1. To gather information on best practices of pooled trust programs, forums were held at The Arc's conventions in 1998 and 1999. The invited participants were those who operated pooled trusts and attorneys who were experts in financial planning. Many were also parents of a son or daughter with a disability. The forum participants were led through a process of examining pooled trust programs and identifying key features representing quality in the operation. The forum outcomes were documented in a draft of Pooled Trusts Programs for People with Disabilities: A Guide for Families. The draft document was sent for review to forum participants and to all other of the 28 known pooled trust programs in the U.S., both those affiliated and not affiliated with The Arc. Contact information for these programs came from a list that The Arc maintains. About half of the reviewers were participants in the forum. The comments and recommendations from these reviewers were used to prepare a revised document. The document received a final review from two attorneys, two pooled trust directors, two RRTC staff and two parent advocate advisors to the project. Data analysis from this study addressed research question #1: What information do families and individuals need to make an informed choice about using pooled trust programs?

Study 2. The trust program survey was developed in collaboration with the National Guardianship Association and pilot-tested by three forum participants. It was sent as a mail survey to the 28 known pooled trust programs. This study was designed to address research question #2: How are pooled trust programs organized and what services do they offer? Data was collected from 10 programs. It was determined that the best use was as additional information for developing the pooled trust guide for families.

Study 3. The family survey was mailed to The Arc's total membership in the quarterly newspaper. Families who are using a trust program or who have undertaken other financial planning were solicited to respond to a questionnaire. The family survey was designed and field-tested to minimize response burden in terms of length of time to complete and readability/comprehension of questions. Closed-ended questions were used with multiple responses. Data from the family survey was analyzed to examine the types of financial planning families have used, amounts of financial investments, level of satisfaction with various services, unmet needs and related areas, and examined to determine if respondent's role (parent, professionals), age, ethnicity, geographic locale, access to programs, training or other assistance, and similar variables are significant factors in decisions about types of planning, amount of financial investment and level of satisfaction. Data analysis of this study responded to research question #3: What are the experiences and levels of satisfaction of families who have used pooled trust programs? The results were published in The Arc's newspaper.


Key Findings and Potential Implications



Families' needs for information on guardianship and alternatives, trusts and planning for services and supports are well documented (Heller & Factor; 1991, Heller & Factor, 1993). However, early studies indicate that few families conduct financial planning for a family member with a disability. Heller & Factor (1991) found that only 31% of families in their study contacted an attorney to initiate planning. The survey (study 3) conducted by this project heard primarily from families who were engaged in future planning. Seventy-four percent of the 223 respondents had a financial plan in place for their family member with a disability. Only 5 % of these respondents used a pooled trust.

Many of the 26 % who had not develop a financial plan assumed that such planning for the relative with a disability is just for people who are wealthy. This supports the importance of educating families about options other than a trust established with a financial institution. The use of a pooled trust is one option. However it is not universally available, as only 22 states are known to have pooled trusts operating, and not all of these are available to families statewide. This research has the potential to improve trust services and help build the capacity of families to "take control" of financial future planning, a complex area that may intimidate families.

Findings from these studies and others of the RRTC will be used to produce a new publication for families to guide them in future planning. It will combine and be an update of two publications of The Arc popular with families (A Family Handbook on Future Planning, How to Provide for Their Future now out of print). It will incorporate RRTC research from the consumer initiated planning (Heller) and family initiated housing projects (Factor). While not replacing the need for an attorney or other professional, the publication will guide families to increased decision-making and control of financial, legal and services/supports planning.

* Previously on the grant, no longer on this project

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