www.PooledAdvocateTrustInc.com

           A South Dakota Trust for Individuals with Disabilities

PATI (Pooled Advocate Trust, Inc.) is a nonprofit South Dakota corporation with 501(c)(3) tax exempt status.  PATI manages the first pooled trust for individuals with disabilities in South Dakota – and the first such trust in the country which qualifies as a domestic asset protection trust. 

The pooled trust is a “special needs trust” which provides for monetary distributions which enhance individuals’ quality of life without spoiling their eligibility for public benefits and programs.  The Trust is administered by First Premier Bank in Sioux Falls, South Dakota as Trustee. 

PATI can help:

• provide financial assistance to a family member without sacrificing public assistance such as SSI and Medicaid.
  
• transfer an individual’s or spouse’s assets to a trust and achieve earlier qualification for public long term care or nursing home funding.
  
• ensure that a personal injury settlement is not consumed by long term care costs.
  
• preserve assets from the reach of nursing homes or long term care costs.
  

Frequently Asked Questions

What does PATI do?

PATI oversees and manages the operation of South Dakota’s first pooled disability trust, helps identify potential Trust beneficiaries and their families, and assists with the application process.   The Trust is for the benefit of “beneficiaries” -- individuals with disabilities for whose benefit Trust distributions are made.

Who is an eligible “beneficiary” of the Trust?

An individual is an eligible beneficiary so long as he or she has a disability and retains a South Dakota residency.   The following list provides some examples of potential Trust beneficiaries:

1. Children or adults with disabilities;
2. Elderly persons who have experienced a disability because of a stroke, Alzheimer’s Disease, traumatic brain injury, cancer or other reasons;
3. Nursing residents, soon-to-be nursing home residents;
4. Heirs about to receive an inheritance that would otherwise disqualify them from receiving public benefits such as Medicaid; or
5. Recipients of court settlements who need to apply for or protect their eligibility for pubic benefits.

Who can act as a “grantor” of the Trust?

Any of the following persons can join the Trust as a “grantor” (the grantor is the person who joins the Trust for the beneficiary):

1. The beneficiary himself/herself can be the grantor.
2. A person acting on behalf of the beneficiary such as a parent, grandparent, or conservator.
3. A court of law can act as the grantor.

What is a “Trust advocate?”

The job of the Trust advocate is to identify distribution requests for the beneficiary and act as a liaison between the Trustee and the beneficiary. The Trust advocate also helps to watch out for the beneficiary’s best interests and advocate for their needs. In some circumstances, the Trust advocate is also the beneficiary. In others, the Trust advocate may be a parent, spouse, or trusted friend.

How is the Trust funded?

The Trust can be funded only with cash.  If the beneficiary has property or assets which will be contributed to the Trust, these must be first liquidated as the Trustee cannot accept contributions of non-cash property.  Generally, a Trust sub-account is funded with a beneficiary’s own funds, or those of his or her spouse.  Other special needs trust options are available when establishing a “third party” trust for the benefit of a child, sibling, or friend with a disability.

What are the costs?

There is a one-time non-refundable application fee of $100 payable to PATI.  The Application (schedule A) has additional information regarding Trustee fees. 

How are Trust funds invested?

The Trustee is responsible for investment of Trust funds.  Because the Trust is a “pooled Trust,” the Trustee pools investments, but maintains a separate account for each beneficiary.  The Trust’s investments are professionally managed and invested with a conservative investment philosophy.

Is there a minimum investment in the Trust?

There is no minimum investment or contribution to the Trust. 

What are the Trust funds used for?

Amounts contributed to the Trust for a specific beneficiary are used for a beneficiary’s sole benefit.  Government benefits (e.g., Medicaid and Supplemental Security Income) can provide primary living needs such as food, housing and basic medical care.  The Trust directs the Trustee to make distributions for items not provided by public benefits.  Examples include:

1. medical or dental treatment for which there are no available public funds;
2. supplemental dietary needs, eyeglasses, mobilized wheelchairs and other assistive technology;
3. travel, companionship, cultural experiences, entertainment, musical performances or lessons;
4. movies, computers, manicures, massages, books, cable tv, radios, telephone service; and
5. other enrichment opportunities appropriate for the individual beneficiary.

What happens to contributions to the Trust remaining at the beneficiary’s death?

Federal law requires that whenever assets remain in a beneficiary’s sub-account at the beneficiary’s death be used to repay the state’s Medicaid program only to the extent funds are not “retained by the Trust.”  This makes the pooled Trust unique; other special needs Trusts which are funded with a beneficiary’s or a beneficiary’s spouse’s own assets must contain a mandatory “payback” clause which requires the Trustee to reimburse the state for all Medicaid benefits provided during a beneficiary’s lifetime.

What are the “asset protection” features of the Trust?

In 2005, the South Dakota legislature authorized “domestic asset protection Trusts.”  The Trust conforms to these new statutes, preserving Trust sub-accounts from the reach of beneficiaries’ creditors.  This helps protect some beneficiaries from themselves; if a beneficiary incurs credit card debt or is named in a lawsuit, the Trust sub-account is usually insulated from garnishment or seizure.  (There are exceptions to the asset protection features of the Trust, such as claims for child support made by a minor child of a Trust beneficiary.)  The Trust is the very first of its kind in the entire United States to provide this type of asset protection in a pooled Trust for individuals with disabilities.

How does the Trust work?

The Trust is authorized under federal law.  42 U.S.C. section 1396p(d)(4)(C).  The Trust is also authorized under South Dakota law.  A.R.S.D. section 67:46:05:32:03(3).  According to state and federal law, amounts contributed to the Trust will not disqualify the beneficiary for Medicaid.

How can I learn more?

Contact PATI at tom@gpnalaw.com, or contact PATI’s founder, attorney Thomas E. Simmons, at (605) 342-1078. 

DISCLAIMER: PATI provides neither tax nor legal advice.  PATI assists with the application process and answers questions about the Trust but always encourages applicants to discuss legal or tax questions with their professional advisors.

COPYRIGHT © 2005, 2011 by Pooled Advocate Trust Inc. – All Rights Reserved