How does a Qualified Income Trust affect Medicaid eligibility?

Trusts are a commonly used tool by those who plan ahead for Medicaid benefits when they age. Typically, older adults living on a fixed income may have a hard time covering the full cost of paying for nursing home care or skilled nursing support as they age in place or undergo hospice treatment in their own homes.

Medicaid is a crucial support for many older adults who do not have the personal resources to directly pay for those medical services as they age. A Qualified Income Trust, also sometimes known as a Miller trust, could play a role in someone’s Medicaid planning.

The impact of a QIT/Miller trust

The income that someone earns could be far below what is necessary to pay for nursing home care or similar intensive support services. However, there is a gap between what it costs to pay for nursing home care per month and the Medicaid eligibility income threshold. Texas lawmakers recognized this gap and changed the law to allow advance planning options for those facing imminent retirement.

Individuals can create a Qualified Income Trust to speed up the Medicaid qualification process or increase their chances of getting benefits when they need medical support. They can file state forms to arrange for funds to transfer automatically into the trust from their source of income. The resources in the trust will generally not count against an applicant.

Those who might otherwise have income slightly too high to qualify for benefits could use a trust to connect with the support they require to pay for around-the-clock medical care.

Planning is crucial for those who need benefits or want to preserve assets

If you worry that you won’t be able to qualify for benefits when you need them and will then not have the resources necessary to move into a nursing home or if you worry that you will qualify for benefits and then lose your home to the estate recovery process, the creation of a trust and other advance planning efforts can make a major difference in your financial stability.

Not only can you preserve assets for your golden years, but you can also potentially protect specific assets for family members after your death. Learning more about Medicaid planning can help those who may eventually require benefits as they age.