What files are most suitable for a Pooled Account Trust?
a. The amount of corpus is primary concern. A stand-alone trust with over $100,000 corpus can absorb reasonable fiduciaries fees without long-term consequences to the beneficiary while a trust with for instance $50,000 cannot. By legally combining funds and observing relevant regulation, ELM Pooled Account Trust current annual fee is $1,080.00
b. How much help does the beneficiary need? PATs charge less because they do less. There is not a single trust officer per beneficiary. There typically are not annual meetings or court appearances such as annual accountings. There are no surety bonds. PATS work best where they primarily write checks, while providing simple financial protection and do not interfere with ongoing eligibility for government benefits.
c. Cases that do not require ongoing Probate/Surrogate Court involvement. Some files will require court approval for transfer to D4C Pooled Account Trust and Kemp Klein Law Firm may nonetheless want court approval on the transfer of any file which it is currently serving as trustee. The costs of a one-time court appearance should quickly be offset by ongoing savings in administration. However, some courts may want to impose continuing court supervision or the requirement of a surety bond on the PAT account, which may end up being as expensive as the current D4A operations.
d. Files in which there is a network of family, friends, or advocates who can help advise the PAT of the beneficiary’s needs.
e. Files in which the beneficiary lives in Michigan do not require any additional legal or administrative work at the PAT level, since we at Kemp Klein know Michigan’s particular rules regarding eligibility for government benefits programs and we can appear in any court in the state. Files in which the beneficiary lives elsewhere may have higher expenses if court appearances or intervention in administrative proceedings for government benefits is required. Note that ELM currently has several out-of-state files, and there haven’t been any problems or additional costs to date, but this cannot be guaranteed.
Requirements for transferring the file to a Pooled Account Trust:
a. The current D4C beneficiary must be under 65 at time of transfer to PAT. Further, the PAT cannot accept any additional payments on behalf of the beneficiary after s/he turns 65, so D4C trusts with structured payments coming into them need to be reviewed case by case.
b. The beneficiary must be disabled per Social Security, SSI or Medicaid.
c. The beneficiary should be on at least one significant “needs-based” government benefits programs or need one.
The following fees may be charged by the Trustee:
a. An annual administration fee, currently $1,080.00, payable in monthly increments of $90.00 per month. The annual fee may be changed from time to time, with written notice to all beneficiaries. This fee includes within it a computer software fee.
b. A one-time enrollment fee of $500.00 at the time this Joinder Agreement is executed. The enrollment fee covers the cost of opening a Trust sub-account for the Beneficiary. One-half of this fee is paid to the 501(c)(3) Charity, Elder Law.
c. If requested by the Beneficiary or his or her Guardian, or if determined appropriate by Trustee, a reasonable and customary case management assessment fee will be charged. The assessment fee covers the cost of establishing an individualized care plan for the Beneficiary.
d. Administrative fees are described in Paragraph a. above. Additionally, Elder Law of Michigan, Inc. note that on occasions Beneficiaries do not have their own private attorney(s) and may wish legal representation for reasons such as estate planning, a landlord/tenant matter or other dispute. Elder Law of Michigan, Inc. and its Attorneys and Agents, the Kemp Klein Law Firm, P.C., prefer that Beneficiaries hire their own attorneys. Elder Law of Michigan, Inc. then can pay the Beneficiary’s attorney from his or her Trust. However, Elder Law of Michigan, Inc. does realize that some Beneficiaries do not have their own attorneys. If a Beneficiary or his or her Guardian wish to retain the Kemp Klein Law Firm, P.C., Elder Law of Michigan, Inc. and the Kemp Klein Law Firm, P.C. are agreeable, providing it is understood that the Beneficiary (or his or her Guardian) recognize that the Kemp Klein Law Firm, P.C., already represents Elder Law of Michigan, Inc. In complicated matters, a Letter of Representation may be prepared, if determined necessary by Kemp Klein Law Firm, P.C.
e. Costs and expenses of protecting or defending the Trust from any claim, demand, legal or equitable action, suit, or proceeding in general may, in the sole discretion of Trustee either (a) be apportioned on a pro rata basis to all Trust sub-accounts, or (b) be charged only against the Trust sub-account as to the affected Beneficiary. The legal costs and expenses incurred for administering a specific Trust sub-account activity, including but not limited to court appearances, bond costs, or issues relating to realty or vehicles, will be charged solely to that Trust sub-account.
f. If the Grantor/Beneficiary is subject to any additional fees, a schedule of these fees is attached to this Joinder Agreement.
g. Grantor/Beneficiary understands that Elder Law of Michigan, Inc., will review the costs associated with maintaining and administering the Trust. Elder Law of Michigan, Inc., reserves the right to change the fees charged under this Agreement, including Schedule A, upon 60 days written notice to the Grantor/Beneficiary or his or her designated Representative.