The Disability Foundation is a nonprofit organization and a type I supporting organization of The Dayton Foundation. The Disability Foundation is a public charitable organization under Section 501(C)(3) and 509(a)(3) of the Internal Revenue Service Code of 1986, as amended. The mission of The Disability Foundation is to enhance the quality of life for people with disabilities by complementing public benefits through the prudent management of financial resources.

The Dayton Foundation established The Ohio Community Pooled Annuity Trust (OCPAT) in 1998. The Disability Foundation established the Ohio Community Pooled Flexible-Spending Trust in 2006, updating it in 2014. The Disability Foundation is the Distribution Trustee of both the OCPAT and the Flexible-Spending Trust. These Trusts are Medicaid Payback Disability Pooled Trusts, set up pursuant to (42 United States Code Section 1382c(a)(3)).

When an individual with disabilities receives or is set to receive, a lump sum such as from a personal injury settlement, a bequest from an estate or trust, or a back payment from Social Security, establishing a trust can protect the individual’s SSI/Medicaid disbursement.

Examples include:

• A parent/grandparent wishes to include a child or grandchild with a disability in their estate plan.
• An individual needs to distribute assets/resources in order to qualify for public benefits such as SSI and Medicaid.

To benefit from the financial planning of a pooled trust, the beneficiary must be considered disabled within the Social Security Act’s definition of disability (42 United States Code Section 1382c(a)(3)). If you have questions about qualifying disabilities, please contact us.

Only a Qualified Donor can establish a pooled trust to benefit someone with a disability. Qualified donors include individuals with disabilities (of any age), their parents or grandparents, legal guardians of estate or other family members.  An account may also be established through a court order. A pooled trust may be established during the lifetime of a qualified donor, or be included in a donor’s estate plan to be established upon the death of the donor.

Powers Of Attorney

Although a Power of Attorney may be used to establish a trust, keep in mind that  Ohio Revised Code 1337.42(A)(1) states that the power to create an inter vivos trust must be expressly granted in the document.

To be clear – To create a trust is considered a “hot power” and the principal must specifically state that the agent has the ability to “create trusts” see ORC 1337.42.

The Ohio Community Pooled Annuity Trust (OCPAT) is a first party trust and is an account that will provide a lifetime plan of payments, backed by our sponsoring organization, The Dayton Foundation. When a donor sets up an account in this trust, an annuity calculation is made and a monthly benefit determined. Each month that amount is credited to the individual’s spending account. A major advantage of this trust is that the monthly benefit is guaranteed for the life of the individual.

The Ohio Community Pooled Flexible-Spending Trust is a first party trust that provides an option for families who do not want the annuity limitation in the OCPAT. The only limit on the amount that can be spent is the amount in the individual’s account. This provides more flexibility if a major purchase is required.

The Third-Party Flexible Spending Pooled Trust is created with money provided by anyone other than the beneficiary. The beneficiary cannot create a Third-Party Trust, nor can any monies they have ever owned be deposited into the trust. Since the money never belongs to the beneficiary, upon their death, there is no Medicaid Payback and remaining money may be distributed according to the beneficiary’s wishes. Trusts of this type are typically established with funds given directly to the trust, an inheritance not yet distributed to the beneficiary or life insurance policy proceeds directed to the trust.

The OCPAT is a life income plan for supplemental needs (as defined in Ohio Admin Code §5123:2-18-01) without causing loss of Medicaid and SSI benefits. A fixed amount will be available quarterly, from their individual spending account, to support lifetime supplemental needs or the fixed amount can be accumulated for a future activity. Assets of all trust participants are pooled for investment purposes, however, a separate account is maintained for each beneficiary.

Each account agreement is a general obligation of The Dayton Foundation backed by the full assets of both The Dayton Foundation and The Disability Foundation.

There are no initial set-up fees to establish an account with The Disability Foundation and no annual maintenance fees are charged.

The Flexible-Spending trusts provide an option for individuals and families who do not want the annuity limitation as offered in the OCPAT. The only limit on the amount that can be spent is the amount in the individual’s account. The Flexible-Spending Trusts can be intended for long-term use, however, they do require more financial advising by the individual and his/her Personal Representative.

There is a one-time initial setup fee and an annual administration fee, both very affordable.

The Disability Foundation has been working with families in the state of Ohio for more than 20 years, establishing over 800 successful trusts for people just like you. We have the experience and expertise to navigate the complex regulations related to government benefits and we enjoy helping families find financial solutions to benefit eligibility. Because we have a standard master trust (applied to every beneficiary without alteration and reviewed by the SSA), we can offer an affordable alternative and much of the time, we are able to establish trusts without the fees required by banks and other institutions.

By law, the amounts may only be used for the supplemental needs of the individual. While the Trust cannot provide for an individual’s basic necessities, such as food, clothing or shelter, it can provide for the “extras” in life that greatly improve an individuals quality of life, including travel, hobbies or recreation. Under Ohio law, supplemental needs can include: items beyond necessary food and clothing, vacations, hobbies; other expenditures used to provide dignity, purpose, optimism and joy to the beneficiary; items that Medicaid and other government programs do not cover or have been denied payment include medical costs such as dental and vision or money to supplement rent payments.

A personal representative selected by the family oversees the distributions to ensure that the individual’s best interests are being met. The personal representative will submit a request to The Disability Foundation. The Foundation’s Distribution Committee will monitor requests to ensure that an individual’s account is used for supplemental needs in order to protect the individual’s public benefits.

If beneficiary has a Flexible Spending Trust, we require the trust be moved to the new state. There are pooled trusts in every state so we can help find a trust and move the funds. Although SSA rules are consistent in every state, not every state administers Medicaid the same because they may adopt a different state plan. Therefore, it will be important to contact and elder law attorney in the new state and become familiar with the Medicaid regulations of that state.

We will pay housing expenses if the person is not on SSI and as long as no one else is living in the property (i.e. a child or grandchild).

If someone else is living in the property and the beneficiary is not because they are in the nursing home we will pay real estate taxes and homeowner’s insurance, but no utilities.

As long as a beneficiary is not on SSI, the payment of housing expenses should not impact benefits. As long as someone else lives in the house while the beneficiary is in a facility, utilities, etc. would not be paid by the trust because the beneficiary is not using the utilities so there is no benefit to the beneficiary.

For the OCPAT, any accumulated funds remaining in the individual’s spending account after he or she dies must be paid to the State of Ohio to reimburse Medicaid for all expenditures made during the lifetime of the Beneficiary. The balance or “remainder” of the Charitable Gift Annuity will remain in the trust and help support programs and services for other individuals with disabilities.

For the Flexible-Spending Trust, 25% of any principal remainder will remain in the trust to help support grant programs and services for other individuals with disabilities and the remaining 75% can either go to designated beneficiaries (after repayment to Medicaid for expenditures made on behalf of the beneficiary) or remain in the trust to help other individuals with disabilities.

Medicaid Payback to Ohio Department of Medicaid

Upon death, we wait 45 days before we initiate the Medicaid Payback process to allow any bills to come in for expenses that were incurred prior to death. After the 45 days, we will request the initial Medicaid Liability and remainder funds from KeyBank.

We will then wait five months from date of death to request the final Medicaid claim because Medicaid providers have that long to bill Medicaid. If the initial Medicaid claim is larger than the money left in the sub-account, we will pay the claim in full because waiting until five months from date of death will not change that the Medicaid claim is more than the amount available to pay it from our Trust.

If we rely on a Medicaid claim that is sent to us too soon after the date of death, it may not be “final,” and the result is that we have underpaid Medicaid.

Final Distribution

Only the Personal Representative can request post-death distributions. The Personal Representative should use our Distribution Request form and must submit all post-death distributions together in a single request. We cannot accept multiple request.

Funeral Expenses: We strongly recommend preneed funeral planning and submitting distribution requests before a Beneficiary’s death when possible. In certain circumstances, the trust may be able to pay for items after a Beneficiary’s death. However, this depends on the type of trust and may require approval from the State of Ohio and any other state in which the Beneficiary received Medicaid benefits. Funeral expenses that we are willing to consider can only include those funeral expenses that are within the confines of the funeral.  We will not allow for travel for relatives, or hotels.

Final legal fees: Again, we will consider legal fees incurred in the final administration of the beneficiary’s estate. Again, as with funeral expenses, we will have to seek approval from the State of Ohio and any other state in which the Beneficiary received Medicaid benefits.

For the OCPAT, donations qualify as a charitable gift to The Dayton Foundation, if funds are contributed by a parent or grandparent. The amount of the charitable deduction varies, depending upon the age of the individual and the amount transferred to set up an account. A portion of disbursements are treated as “taxable income” to the fund recipient for income tax purposes. Each trust recipient receives a 1099 form for each taxable year. For the Flexible-Spending trust there is no charitable gift component to trust initiations. Disbursements are not treated as “taxable income.” Many trust recipients will receive a K-1 tax form for each taxable year, depending upon the size of the trust.

To learn more about The Disability Foundation, contact Greg Darling, Executive Director, at (937) 225-9939 or at gdarling@daytonfoundation.org.