Overall, a pooled trust is a trust that is meant for multiple individuals that have special needs. It is established and then managed by a non-profit organization that is looking out for the best interests of those individuals with special needs.
Pooled trusts – typically – are a way to help family members be relieved from the job and responsibilities of being the trustee. It also allows experienced and knowledgeable professionals to take on the many important – but often tedious – responsibilities of being the trustee.
If you are curious about what sets a pooled trust like KTS Pooled Trust apart from first and third-party trusts, take a look at the major differences below:
- Pooled trusts do not come with age limits
- The person that is disabled can be one of the trust’s grantors
- If there are excess funds left over at death, those funds are typically kept by the non-profit
Though there are, of course, many benefits to setting up a pooled trust for everyone involved, there are also some important mistakes that you need to be aware of so that you can avoid them when you begin establishing the trust.
Mistake 1
The first mistake that people tend to make when they are creating a pooled trust is to not get legal advice from an attorney familiar with the situation ahead of time. There are a lot of different kinds of pooled trusts and they can vary greatly in terms of the kind of care that they offer, the way they handle assets, and more. Making sure that you are setting up the right kind of pooled trust for the job is highly important.
Mistake 2
Another mistake that people tend to make when they are establishing a pooled trust is that the family members of the disabled person do not succeed in updating their own estate planning documents. Not updating estate plans to make one of the disabled person’s pooled trusts one of the beneficences in life insurance policies, retirement accounts, wills, and trusts can end up resulting in an avoidable delay in the beneficiary actually receiving the money when the time comes.
Mistake 3
Finally, one of the most important mistakes that everyone considering establishing a pooled trust needs to know about is failing to make a plan whatsoever. When you are alive, you may have spent a lot of time working as the primary caregiver of a disabled person. That is especially true if the disabled person is a child or sibling. However, failing to plan for the future or unforeseen accidents that can lead to your unexpected passing can cause a horrible situation for the disabled person in your life. Making a plan for what will happen to their care and their financial security in the event of your passing may be a hard topic to cover, but it is crucially important to do so to ensure that they remain safe and comfortable for the remainder of their lives.
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