Learn about Nursing Home Qualified Income Trusts
Authored By: Georgia Legal Services Program®
In October 1993, a federal law became effective which allows applicants over the specified state income cap to establish an Irrevocable Qualified Income Trust (QIT) in order to become eligible for Nursing Facility, Hospice and Home and Community Based Services (i.e. Community Care Services, etc.) Medicaid.
What Is the QIT and How Does It Work?
The Qualified Income Trust is an instrument that is used for Medicaid applicants that have income over the limit. It involves a legal document and a Qualified Income Trust bank account. It is composed of the Medicaid applicant’s own income (Social Security, pension, etc.). Funds that are deposited into the Trust account each month are not counted as income in determining eligibility for Medicaid. By depositing the income in excess of the state cap that income becomes not countable and eligibility may be established. The QIT account must be properly funded on a monthly basis in order to achieve Medicaid eligibility monthly. Properly funded simply means that you have deposited, at minimum, the difference between the specified state income cap (minus a dollar) and the applicant’s total income.
What Do I Do Now?
Once the QIT document has been executed, you will take the document to a bank. You will open an account titled Qualified Income Trust. You will need to properly fund the account. The Medicaid Applicant will not be eligible until the first month that the trust has been properly funded. Copies of the QIT document, bank account document, and verification of a deposit into the account must be provided to the county Department of Family and Children Services (DFCS). The document will be forwarded to the Department of Community Health’s Legal Section for approval.
Every month a minimum deposit must be made into the QIT account. Talk to your lawyer about the amount. This amount is an estimate based on what we know now. More than this may be deposited, but not less. If this deposit is not made, the applicant will not be eligible for Medicaid that month. Save your deposit slips or bank statements, as you will be required to provide proof of each deposit to DFACS. We strongly encourage that the individual’s monthly gross income be deposited into the QIT account each month.
The funds deposited into this account must be used each month to pay the Patient Liability to the nursing home, and, if applicable an amount to the community spouse. It is a good idea to make these payments as soon as possible, since upon death of the individual, the state receives all amounts remaining in the trust, up to the amount that has been paid on behalf of the individual by Medicaid.
Free Qualified Income Trust (QIT) Documents
As of 2015, there are only two QIT forms you may use. Here are the two forms. Talk to a lawyer to choose the right form for you.