People in New Jersey who are in need of nursing home care or other types of assisted living care may be planning on using Medicaid benefits to fund such care. In order to qualify for Medicaid, a person’s income must be below a certain level. However, through the use of a Qualified Income Trust it is possible for those with higher incomes to receive Long Term Services and Supports if they are otherwise eligible to do so.
A QIT is a written trust instrument in which a dedicated financial account is established. A person’s monthly income that goes above the LTSS income threshold is placed in the QIT account, and thus will not count as income when it comes to determining eligibility for LTSS. However, any money placed in a QIT must be spent every month as determined by the New Jersey FamilyCare Eligibility Determining Agency.
Social Security benefits and pension payments, along with other sources of income, can be placed in a QIT each month they are received. While a person can choose which sources of income to place in a QIT, all of the income from a single source, for example the full amount of a person’s monthly Social Security benefits, must be placed in the QIT.
QITs can be a useful tool for people in New Jersey. However, it is important that these documents are carefully drawn up, so they meet all the necessary legal requirements. A poorly drafted QIT might prove to be ineffective. Those interested in executing a QIT as part of Medicaid planning may want to get more information about QITs.