When a disabled individual has funds over the asset threshold to qualify for public benefits, families have various planning options to consider to maintain eligibility. Families may further consider a combination of any of the options below.
FIRST PARTY SPECIAL NEEDS TRUST
A first party special needs trust can be established for any disabled individual under the age of 65. A first party special needs trust must be irrevocable, have a trustee with the sole discretion to make distributions to the beneficiary, and require the Trustee repay the state upon the beneficiary’s death for Medicaid benefits received during their lifetime. Parents, grandparents, guardians, a court of law, or even the disabled individual can establish this trust. A first party special needs trust is funded solely with assets that belong to the disabled individual. Any type of property can be held in a first party special needs trust. A trustee (that is not the disabled beneficiary) is chosen to administer the trust. The trustee is the person that manages the funds and provides distributions to the disabled individual. The first party trust is used to supplement the disabled individual during their lifetime and should not be used for items/services that are being provided by public benefits without careful consideration. Examples include any services covered by Medicaid and shelter expenses covered by SSI payments.
POOLED TRUST
A pooled trust is an option permitted in Ohio for any disabled individual – including those over age 65. Assets placed into the pooled trust after age 65 preserves Medicaid eligibility, but a penalty will be imposed for individuals over age 65 receiving SSI benefits. A pooled trust can be established by a parent, grandparent, guardian, court, or the disabled individual. The funds contributed to the pooled trust must also belong to the disabled individual. Generally, the only funds that can be contributed to a pooled trust are liquid cash assets – no real estate or other property. A pooled trust takes the funds from various disabled individuals and pools them together to be managed by an investment company for growth purposes. Each disabled individual has their own account which can be used for the benefit of the individual. Distributions are subject to approval by a nonprofit entity that manages the pooled trust.
ABLE ACCOUNT
A STABLE Account (Ohio version of ABLE) can be established for any individual that is blind or disabled before age 26. Effective January 1, 2026, the age requirement for disability will increase to age 46 – so any individual that is blind or disabled before age 46 can establish a STABLE Account. An account can be opened by a disabled individual, a power of attorney, a guardian, a spouse, a parent, a sibling, a grandparent, or the individual’s Representative Payee. Contributions– cash or liquid assets up to $20,000 annually (2026) – can be made to the account by any person. If the disabled individual is working, an additional $15,650 can be contributed. If the STABLE Account ever holds more than $100,000, the individual’s SSI benefits will be suspended until the balance is reduced to less than $100,000. Funds can be used for any qualified disability expenses. Some examples include education, transportation, housing, living expenses, funeral/burial, health and wellness. Ohio recently passed HB 96 which included a provision that money in a STABLE Account at the death of the beneficiary will not be subject to repayment to Medicaid in most cases – unless required by federal law.
Each of the options discussed above can ensure that your loved one will maintain the public benefits that they need and further provide a source of funds to supplement them during their lifetime.
Resources:
STABLE: https://www.stableaccount.com/
Community Fund Ohio (Pooled Trusts): https://www.communityfundohio.org/
Disability Foundation (Pooled Trusts): https://disability-foundation.org/