For many older adults, public benefits like Medical Assistance and Supplemental Security Income provide essential support for staying healthy and independent. Yet, it can be stressful to navigate public benefits when qualifying for them requires individuals to have extremely limited financial assets. The rules to qualify can feel out of step after years of working, saving and careful planning.
In my work with older adults, I regularly meet people who find themselves in financial situations they never expected. An older adult receiving public benefits might unexpectedly receive money from an inheritance, a personal injury settlement, retroactive benefit payments or proceeds from the sale of a home. This money is meant to provide financial security, but it can unintentionally push someone over eligibility limits for critical benefits.
When that happens, many individuals and families are forced into difficult choices. Their options are limited, which can be overwhelming. Some individuals choose to spend down their assets quickly to maintain eligibility. Others explore private pay options or complex legal arrangements. These approaches can be costly and difficult to navigate. In many cases, they reduce a person’s ability to preserve funds for future needs or unexpected expenses. For individuals already managing health concerns or major life transitions, this added complexity can be challenging.
A pooled trust offers a different path. It allows funds to be placed into a professionally managed account, helping individuals remain eligible for public benefits while preserving financial resources for future needs. At Lutheran Social Service of Minnesota, pooled trust services are designed specifically to support this balance. Each participant has an individual sub-account, and their financial assets are pooled with other participants’ assets for investment purposes. Each sub-account ensures a participant’s funds remain dedicated to their personal needs and circumstances.
When I introduce pooled trusts to older adults, they are often surprised to learn that they are not just a financial tool, but a system of ongoing support. Participants are not left to interpret complex rules on their own. Instead, they have a knowledgeable team assisting with required reporting, account management and distribution requests. That kind of guidance can make all the difference, especially during times of transition or uncertainty.
There are two types of pooled trusts available, each designed to meet different needs:
- A Special Needs, or self-funded, pooled trust protects funds that belong to the individual, such as inheritances, settlements, savings or retroactive benefits. The individual, a parent, grandparent, legal guardian or a court can establish a special needs pooled trust account. We are available to talk with you about timing, which is an important consideration when setting up a special needs trust for older adults. Minnesota and federal law also require Medicaid reimbursement for expenses made on behalf of an individual and we can offer guidance here as well.
- A Supplemental Needs, or third-party, pooled trust allows family members or others to contribute funds on behalf of an individual without affecting eligibility. These are often used as part of estate planning to ensure long-term financial support while preserving access to critical public programs. A supplemental needs trust generally has no Medicaid payback provision and can pass to beneficiaries.
Both options provide a practical, cost‑effective alternative to rapid spend‑downs. Assets are managed in compliance with state and federal requirements — the government does not count assets in a pooled trust the same way as personal assets when determining eligibility for public benefits. This allows individuals to preserve resources while still accessing the care and services they rely on.
Beyond preserving eligibility, pooled trusts provide flexibility. Funds can be used for expenses not covered by public programs — such as medical or dental services not covered by insurance, eyeglasses, hearing aids or prosthetic devices. They can also support quality of life, helping pay for internet or cell phone service, vacations, pet care and social or recreational activities.
These expenses may seem small, but they matter. Public benefits cover essential services, but not many aspects of living well. Having access to additional resources can help older adults stay connected, maintain dignity and remain active in their communities.
Importantly, families can explore this option without any upfront cost or financial pressure. Initial consultations are free, offering space to ask questions, review individual circumstances and determine whether a pooled trust is the right fit. There is no pressure, just a chance to understand the available options and make an informed decision.
Lutheran Social Service of Minnesota has been serving communities across the state for more than 160 years, building trust and providing support through life’s challenges and transitions. I repeatedly hear from individuals and families who say they wish they had known about this resource sooner. For many, a pooled trust becomes a solution that provides greater stability, confidence and peace of mind. Learn more.
Nathan Danielson, Associate Vice President of Older Adults Services, Lutheran Social Service of Minnesota