People who seek New Jersey Medicaid for long term care (in a nursing home, assisted living facility or with home health aides) are often told they should use a Qualified Income Trust (QIT, aka Miller Trust). However, I’ve heard a lot of misconceptions lately about what a QIT is, and what it’s used for. There appears to be some misinformation floating around, so with this blog post, I’ll try to clear it up.
A QIT is a trust that allows a person to become eligible for Medicaid despite their income being higher than the Medicaid limit. To be eligible for Medicaid, applicants must have income within the “income cap,” the income eligibility limit. (There is also a resource cap, medical eligibility and other requirements.) The current income cap in New Jersey is $2,205 per month.
Anyone with total gross monthly income over $2,205 must use a QIT to be eligible for long term care Medicaid. A QIT can be created by a lawyer (including FriedmanLaw), and the trustee (who manages the QIT) should open a bank account for the QIT. Then, income should be direct deposited to the QIT bank account, or transferred every month, and spent every month according to QIT rules. If everything is done correctly, then the income in the QIT won’t disqualify the person for Medicaid.
So a QIT is used to establish Medicaid eligibility for people with high incomes who need long term care. A QIT is not used to shelter excess resources or assets. You can’t put your house in a QIT, or your bank account balance or investments. You can’t use a QIT to hide your assets and then go on Medicaid.
If someone is facing substantial long term care costs and wants to preserve their assets for their family, there may very well be ways to do that through Medicaid planning. If you’re interested in that, feel free to call or email FriedmanLaw for more information. But a QIT isn’t the way to do it.