PLEASE NOTE: To protect your safety in response to the threats of COVID-19, we are offering our clients the ability to meet with us in person, via telephone or through video conferencing. Please call our office to discuss your options.
We have and will continue to keep in place the mechanisms to expeditiously respond to all of our clients’ needs, while maintaining the good health and safety of our employees and clients. It is our goal to continue to provide exemplary legal services and to meet our clients’ needs.

How can a qualified income trust be used in Medicaid planning?

by | Mar 21, 2019 | Firm News, Medicaid Planning And Asset Protection |

To be eligible for Medicaid benefits in New Jersey (referred to as Long Term Services and Supports), a person’s income and resources cannot exceed a certain dollar amount annually. However, does this mean that a person must be impoverished before they can begin receiving LTSS? Not necessarily.

If a person’s gross monthly income exceeds the maximum limit allowed, then it may be possible to funnel the extra income into a qualified income trust, thus allowing them to apply for LTSS. A QIT is a trust that utilizes a dedicated bank account in which any excess income over the monetary limit is deposited. The funds in a person’s QIT account will not be included as income for the purposes of Medicaid eligibility. Social Security benefits and pension income can be placed in a QIT. A person can choose all or some income to be placed in their QIT, but at least all of one source of income (such as a pension) must be placed in the QIT.

However, any money in a QIT must be spent each month as determined by the New Jersey FamilyCare Eligibility Determining Agency. QITs cannot contain funds from the sale of property or funds from a savings account. QITs are irrevocable, and the QIT must be managed by a trustee.

As this shows, QITs can be an important part of Medicaid planning. This post provides a general overview of QITs in New Jersey, but it cannot form the basis of any legal documents a person may wish to execute. Those who want to learn more about how a QIT can help them can seek professional guidance on the matter, so they can make educated choices regarding their long-term care.

findlaw-network