What is a pooled special needs trust, and is PLAN of Arizona right for my family?

When a family joins a pooled trust, they contribute funds to an account held in the nonprofit's master trust. The money is pooled with funds from other beneficiaries and invested together, which allows the nonprofit to earn better investment returns and spread costs. Each beneficiary's account is tracked separately. Distributions come out of that account, and the beneficiary's individual balance grows or shrinks based on contributions, withdrawals, and the shared investment performance.

The nonprofit trustee manages all the details: reviewing distribution requests, tracking Social Security rules, keeping records, and filing any required accountings. Families do not need to appoint a family member or hire a private professional trustee.

PLAN of Arizona (Planned Lifetime Assistance Network of Arizona, Inc.) is the primary pooled trust organization serving Arizona families. Based in Phoenix, PLAN has operated for decades and manages accounts for hundreds of Arizonans with disabilities. PLAN offers:

• Third-party accounts, funded by family members for a loved one with a disability
• First-party accounts (the pooled trust equivalent of a d4C trust), funded with the beneficiary's own money such as a personal injury settlement
• Distribution management that follows Social Security guidelines to protect SSI and AHCCCS eligibility
• Case management and care coordination services, which can be valuable for families without a local support network
• Oversight of spending to ensure benefit rules are followed

Setup fees at PLAN of Arizona are a fraction of what a stand-alone SNT attorney typically charges. Ongoing management fees are charged as a percentage of the account balance, with no large minimum account size requirement.

Here is how the two options compare for Arizona families:

• Setup cost: Pooled trust enrollment fees run a few hundred dollars. A stand-alone SNT drafted by an attorney typically costs $3,000 to $8,000.
• Ongoing management: Pooled trusts charge a percentage fee (often 1 to 2 percent of assets per year). Stand-alone SNTs with a professional trustee also charge fees, and some require a minimum account balance of $200,000 or more to take on the account.
• Trustee choice: Pooled trusts use the nonprofit as trustee. Stand-alone SNTs let the family choose any qualified trustee, including a family member or professional fiduciary.
• Remaining balance at death: Many pooled trusts retain all or part of the remaining balance when the beneficiary dies. Stand-alone first-party SNTs must reimburse Medicaid first, but the rest goes to named heirs. Third-party stand-alone SNTs pass entirely to heirs with no Medicaid payback.
• Flexibility: A stand-alone SNT can be custom-drafted to fit the family's exact goals. Pooled trusts use standard templates with less room for customization.

A pooled trust like PLAN of Arizona often makes sense when:

• The trust estate is under $100,000 to $150,000 and a private professional trustee's fees would be disproportionately high
• No family member is comfortable serving as trustee or living close enough to manage distributions well
• The family values the nonprofit's built-in disability expertise and care coordination services
• The trust is funded with the beneficiary's own money and must be a first-party trust (the pooled d4C option meets that legal requirement without the complexity of a private d4A trust)

A private stand-alone SNT is often a better fit when:

• The trust estate is large, typically $200,000 or more, making the per-dollar cost of professional trustee fees reasonable
• The family wants to leave remaining trust assets entirely to heirs with no retention by a nonprofit
• The family has specific wishes about how distributions are made or specific investments they want to pursue
• The beneficiary needs a trustee who knows them personally and can exercise nuanced judgment about their needs

Families interested in PLAN of Arizona can contact the organization directly to learn about current fee schedules, account types, and the enrollment process. An estate planning attorney familiar with Arizona special needs planning can also help you compare the pooled trust option against a stand-alone SNT to find the best fit for your family's situation and goals.

This question is one piece of a larger picture. For the full Arizona overview, see our Special Needs Trust Arizona: Complete Guide.

Quick reference: see our SNT distribution cheatsheet for a side-by-side of 20 common expenses showing whether to pay from the SNT, the ABLE account, or not at all, and the SSI impact of each choice.