What you Can and Cannot Do with a Qualified Income Trust

Posted on: February 15th, 2017 by Mark R. Friedman

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.

As this website provides general information and isn’t tailored to your particular situation, it doesn’t constitute legal advice and may not take into account rules and exceptions that affect you. Although updated from time to time, this website may not take account of recent legal developments or differences in laws from state to state. For safety sake, obtain individual legal advice before you act! You assume all risk of acting on information contained in this website. This website doesn’t constitute legal advice, and no attorney-client relationship exists unless FriedmanLaw and you execute a written engagement agreement. Please contact us at 908-704-1900 to discuss engaging FriedmanLaw to help resolve your legal concerns.
Homepage photo: Cows grazing at Meadowbrook Farm, Bernardsville, NJ by Siddharth Mallya. October 23, 2012.
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