QUALIFIED INCOME TRUSTS
What is a Qualified Income Trust?
Navigating the complexities of Medicaid eligibility can be daunting. One tool that can help is the Qualified Income Trust (QIT). Also known as a Miller Trust, a QIT is a legal instrument designed to assist individuals in qualifying for Medicaid. It’s often necessary when an individual’s income exceeds Medicaid’s set limits.
The Role of Qualified Income Trusts in Medicaid Eligibility
The primary role of a Qualified Income Trust is to help individuals become eligible for Medicaid. To qualify for Medicaid, individuals must meet certain income and asset limits.
When an individual's income exceeds these limits, a QIT can be used to bring the countable income down to a level that meets Medicaid's requirements. The excess income is placed into the trust, and it's no longer counted as part of the individual's income for Medicaid eligibility purposes.
It is important to note that the trust does not protect assets. It only helps with income eligibility for Medicaid. The trust is not a tool for asset protection, but strictly for managing income. Understanding the difference between income and assets is crucial when considering a QIT. It is also important to remember that the beneficiary of the QIT cannot have direct access to the funds in the trust. No payments should be made out of the trust unless specifically authorized by the terms of the trust. The individual’s monthly patient liability may be paid out of the trust.
Is a Qualified Income Trust Right for Me?
The future of Qualified Income Trusts is tied to changes in Medicaid rules and regulations. As these rules evolve, the role and relevance of QITs may also change. It's important to stay up-to-date with state-specific Medicaid rules to ensure continued compliance and eligibility. Long-term care planning should also consider potential legislative changes and their impact on Medicaid planning strategies.
Consulting with an elder law attorney is the best way to obtain personalized advice and help you make an informed decision.