What if I'm Already the Trustee of a Qualified Income Trust, What Do I Do Every Month?


What if I?m already the Trustee of a QIT, what do I do every month?

If you have already been named Trustee of a QIT, it is most important that you manage the deposit of money into and withdrawal of money out of the QIT properly so that the nursing home resident will continue to be eligible to receive Nursing Home Medicaid. If the Trustee fails to properly handle the QIT, this may result in the termination of Medicaid benefits for the resident, as well as an obligation to repay the program for payments made on the resident?s behalf those months that the QIT was improperly managed.

Here are some helpful pointers to remember when handling the proceeds of a QIT to ensure that Medicaid benefits are not jeopardized.

Monthly QIT Process-This process must be repeated each month that the resident remains in the nursing home under Nursing Home Medicaid.

1.The QIT is unlike other Trusts that you may have heard about. The QIT is an Income Trust, meaning money flows into and out of the QIT each month. Handled properly, the QIT will always have a zero ($0) balance at the end of each month. The only exception to this is if the bank requires a minimum balance to hold the account open.

2.Direct deposits of any monies into the QIT are not permitted.

3.Each month, DFCS will advise the nursing home what the resident?s Patient Liability is for that month and the nursing home will inform the Trustee. ?Patient Liability? is usually all of the resident?s gross income, minus allowable deductions (see below), and minus the $50 Personal Needs Allowance ($90 for Veteran?s Benefits), which the resident keeps.

4.The money deposited into the QIT must be taken from the resident?s income, not from the Trustee?s income or any one else?s income. The resident must be income eligible for Nursing Home Medicaid in the month in which the QIT is funded. This means, that the first month some of the resident?s money is deposited into the QIT, that deposit must be an amount sufficient to reduce the resident?s gross income below the maximum income limit of $1911.

5.The Trustee will make 3 financial transactions each month: 1) deposit a sufficient amount of the resident?s income into the QIT to reduce the resident?s gross income to below $1911 (It is recommended that the gross income be reduced to $1800, so you don?t cut it too close.); 2) withdraw all of the money you just deposited into the QIT and pay it to the Nursing Home. This will reduce the balance in the QIT to zero, (or the minimum the bank requires, if applicable); and, 3) pay the balance of the resident?s Patient Liability to the nursing home from the remainder of the resident?s personal income for the month.

Deductions allowed from ?Gross Income? include:

State and Federal Income Taxes that are required to be withheld by the paying agency are allowable deductions.

Medicare premiums for Part B and Part D are allowable deductions from gross income until the second month following the resident?s approval for Nursing Home Medicaid.

Medical expense(s) that are not covered by third parties or by Medicaid are allowable deductions.

Deductions not allowed from ?Gross Income? include:

- Deductions within the control of the resident for State and/or Federal taxes

- Mortgage payments on the resident?s home

- Property insurance on the resident?s home

Last Review and Update: Jun 30, 2008