Are you running into an issue where Mom or Dad has an income that is higher than the Medicaid income limit yet insufficient to cover their skilled nursing facility bill? Three letters, Q-I-T may be the answer to this problem.

A QIT otherwise known as a Qualified Income Trust or Miller Trust is a program that allows for Medicaid eligibility specifically for seniors with a high income. It is a trust funded solely for the purpose of Medicaid eligibility with income above the institutional limit- $2,523 in 2022 and fluctuating yearly depending on any federal cost of living adjustments (COLA).

Qualified Income Trust Requirements

There are many detailed requirements in setting up a proper QIT, and failure to adhere to any of them can cause a trust to be null, jeopardizing Medicaid eligibility. If Mom or Dad will need a QIT, it’s important that you familiarize yourself with the details before setting one up.

Please note that we intend this information as helpful knowledge and not in any way as legal advice.

Set-Up

Medicaid requires that the QIT account be set up irrevocably by the time that Mom or Dad needs their Medicaid benefits to kick in.

When filling out the trust application, be ready to complete it with the following information:

• The beneficiary (aka Mom or Dad) whose income will be deposited into the trust. If she or he is incompetent, a Power of Attorney or legal guardian will need to act on their behalf.

• A grantor or trustee, such as a family member or friend, who will manage the funds and pay out expenses.

• A successor trustee who can step in as trustee if needed.

• A distributee, who will inherit any funds left in the QIT account after the State of NJ receives its portion.

The State of NJ is listed as the primary beneficiary and receives any funds left in the QIT account upon Mom or Dad’s death- up to the amount paid out on their behalf.

There are additional technicalities in regard to balance allowance, fees, and account set up. Most banks are aware of these minutiae and are happy to assist you. You can also use this template Qualified_Income_Trust_Template.pdf (state.nj.us) provided by Medicaid to be used as the trust application when establishing a QIT account.

Funding

A QIT can only be funded with Mom or Dad’s income- not any other form of resources or asset.  Once income is deposited, it is not counted towards the Medicaid eligibility limit. If Mom or Dad receives more than one form of income, you can choose which income to deposit into the QIT as long as the amount is enough to bring the total income below the limit.

The balance of the QIT needs to be withdrawn by the end of each month and used for approved expenses such as health insurance premiums. If Mom or Dad resides in a  nursing home they will need to give the funds to their facility along with any other income they receive. In order to minimize your monthly accounting, it can be simplest to set up direct deposit of income into the QIT account and automatic withdrawals of any payments out.

Detailed logistics and tight deadlines make setting up a QIT one of the most stressful aspects of a Medicaid application. Senior Planning Services can assist you with this as well as any other questions you may have during this overwhelming time of your life. To find out how we can help you, contact us at  (732) 961-8430 for a free consultation.

*Please note that every state has different legal requirements. Qualified Income Trusts are primarily used in the State of NJ, other states such as NY or CT allow pooled trusts. Senior Planning Services can assist you with finding the requirements in your state.