Parents in Michigan who are concerned about their adult child with disabilities may be looking for a solution to ensure his or her quality of life is maintained after their death. According to FindLaw, special needs trusts are often the estate planning tool that fulfills this goal. There is more than one type of special needs trust, though, and for some families, a pooled-account trust may be the best option.

Rather than being controlled by an individual trustee or a trust company, a pooled trust is managed by a nonprofit organization. It is often beneficial for adults with special needs who are under the age of 65, whose parents may not have the assets to fund an adequate trust, or who do not have a viable trustee option. Assets are pooled in the trust account to make investments more lucrative. The adult child would still have an individual account, and his or her needs, such as services and items beyond basic food, housing and clothing, would be taken care of by the trust. 

The American Bar Association warns that all pooled special needs trusts are not equal, and there are many factors to consider before choosing one. For example, some serve only adults with certain types of disabilities. Other considerations include the following:

• Membership expenses and fees
• The nonprofit organization’s reputation and the experience of its administrators
• Investment performance and oversight
• The trust’s longevity
• Advocacy available to the beneficiary
• How distributions are requested

Many people choose to bequeath the balance of the assets to the pooled trust upon the beneficiary’s death through a provision in their estate plan documents.