LOS ANGELES, April 11, 2007 (PRIME NEWSWIRE) -- The launch of the PLAN of California Master Pooled Special Needs Trust, which will benefit disabled Californians, was announced today by Robert J. Raab, Jr., chair of the PLAN of California Business Committee. A 503(c)(3) organization, PLAN of California serves as trust protector for individual third party special needs trusts and provides personal support services to people with psychiatric disabilities.
Raab, who was vice-chairman of Wilshire Associates Incorporated, a leading global investment and pension consulting firm, up until recently when he decided to leave to pursue other opportunities, said, "We have been working for more than two years to establish this Trust in order to assist disabled people throughout California. It was important to us to establish a Trust that is open to all disability types, with no minimum asset requirement."
In explaining the need for the Trust, Raab noted that California is home to more than 1.2 million people who are physically or mentally disabled and depend on Supplemental Security Income (SSI) to pay for their basic life needs. Individuals who qualify for SSI automatically qualify for Medi-Cal. With the 2007 California SSI benefit at $856 per month, after paying for food, shelter and clothing, the disabled recipient has little to nothing left over for additional health care or supplemental needs.
Additionally, to qualify for SSI, the individual may have no more than $2000 in assets. Should a small inheritance or other windfall occur, acceptance of that money will disqualify them for the "means-tested" government benefits. They are then left with a dilemma: refuse the money or lose their government benefits. The PLAN of California Master Pooled Trust answers this dilemma: the money can be retained in a sub-account within the Trust and be used to supplement, rather than supplant, those government benefits.
"This vehicle provides an important financial service to those who desperately need it," commented Tom Stevens, chairman of Los Angeles Capital Management and member of the Business Committee. "For the Investment Policy Statement for the Pooled Trust we relied on Rosalind Hewsenian, a respected figure in the investment community and an expert in this area who, until last year, was a senior consultant at Wilshire Consulting, the pension advisory business of Wilshire Associates. For decades Roz counseled some of the largest public pension plans in the nation and we appreciate her volunteering her time and expertise."
"Before now, it has been difficult or impossible for a disabled person or their family to establish or administer a Special Needs Trusts in California," Raab said. "Many are too small for large financial institutions to accept into their trust departments. Legal costs to establish 'stand-alone' Special Needs Trusts can be highly expensive, negating the value of establishing one. The PLAN of California Master Pooled Trust can, in most cases, be joined simply by an attorney completing a joiner agreement for the beneficiary or their family."
"The Omnibus Budget Reconciliation Act of 1993 encourages Special Needs Trusts to be administered by non-profits," said Thomas Beltran, the attorney who drafted the PLAN Trust. "In my personal practice I saw a huge need for the advantages that a pooled trust provides, not the least of which is a proficient and professional trustee. Once I saw the group of people Carla brought together, I knew this pooled Trust would be a long term solution for the needs of persons with disabilities throughout California. It's gratifying to be associated with Carla and PLAN."
"The PLAN of California Pooled Trust is an example of a for-profit and nonprofit community partnering to help people who are disabled," stated Tyler Dritz, Vice President of Oppenheimer & Co. Inc., which acts as investment manager for the Trust. "It is our pleasure to serve PLAN of California. We now get to give beneficiaries of Special Needs Trusts the same level of expertise that is usually only available to high worth investors."
Carla Jacobs, who serves as Executive Director of the Plan of California said, "We've been helping families and people with mental illness since 1991 via family generated special needs trusts. It's been heart breaking to see the need out there for a financial vehicle that could help smaller estates and individuals and not be able to respond. The Pooled Trust will allow PLAN to expand its services to many other people. I just bless these good souls who brought the idea to fruition."
All PLAN of California Board Members, Business Committee members and Investment Committee members serve as volunteers and derive no personal benefit from the PLAN of California Master Pooled Trust.
About Special Needs Trusts
A Special Needs Trust must have a trustee that is not the beneficiary. Providing trustee services to a Special Needs Trust requires a unique and obscure knowledge of a variety of disciplines. Few individuals or private trustees can handle the myriad of knowledge that is required. The trustee must understand disability law and services. The assets must be managed in such a manner so that public benefits are not lost because of improper distributions or management. Additionally the trustee must invest and manage the Trust's assets, make distributions, provide reporting and accounting of the assets, allocate trust assets in accordance with prudent investment standards, prepare court accountings, trust tax returns and prepare and file tax returns for the beneficiary.