I used to think Pooled Trusts were only a tool for those with less than $100k. I think this is a common misperception. Part of this, I believe, comes from the possibility that Financial Advisors who are paid based on the assets they manage may not want to give up control. So if their client gets a Special Needs Trust and serves as the Trustee they’ll still be able to manage the funds and get paid.
In my opinion, another contributing factor is I don’t think very many attorneys tell their clients about Pooled Trusts. Pooled Trusts are existing Trusts, you don’t have to pay an attorney to create one for you. All you do is sign a joinder agreement. There may also be a fee, but it’s almost always much less than the thousands of dollars an attorney is going to want to create your Trust.
After serving on the Board of two Pooled Trusts (Shared Horizons and First Maryland Disability Trust) I’ve changed my mind. Yes, Pooled Trusts are GREAT resources for those with less than $100k, because the ability to “pool” accounts provides much better investment options than the beneficiary would get otherwise. They’re also a really good choice for someone who doesn’t have anyone knowledgeable enough available to serve as a Trustee. This is the world I’m in. Originally I was going to use a Corporate Trustee, but candidly they can get pretty expensive.
Cost is just one consideration. Below are six reasons why I’m a fan of using a Pooled Trust.
Benefits of Pooled Trusts
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