In Chicago and across Illinois, pooled trusts let people with disabilities save money without losing eligibility for benefits like Medicaid or Supplemental Security Income (SSI). A nonprofit runs the trust, pools funds for investment and keeps a separate account for each beneficiary to pay for items benefits do not cover. Families can place money into a pooled trust as an affordable way to protect benefits and pay for extra care.
State-specific pooling rules
Here are the key rules you should know about pooled trusts in Illinois:
- 65+ rule: Moving your own money into a pooled trust after age 65 can trigger a Medicaid penalty period for long‑term care.
- First‑party vs third‑party language use: First‑party means the person’s own money while third‑party means money from someone else.
- Medicaid payback: Illinois lets the state recover Medicaid costs from any remaining first‑party funds when the beneficiary dies.
- Leftover money: After the state recovers funds, the pooled‑trust nonprofit distributes or keeps leftover money according to the trust’s rules.
If you are unsure how these rules apply to your situation or if there are exceptions, speak with an estate planning lawyer or a pooled‑trust manager for clarification.
Reminder for pooled trusts
A pooled trust is permanent and irrevocable. This means once you put money in, you cannot take it back out for regular expenses. The nonprofit reviews and approves every withdrawal and pays only for things that directly help the person with the disability. It is also crucial to mention that the withdrawal has to benefit that person alone.
Is a pooled trust for you?
Consider a pooled trust if you want to protect a loved one’s benefits and still save for extras. They work well for families with limited savings or caregivers who feel overwhelmed. Speak with a lawyer who handles disability planning to gain peace of mind.
