What is a QIT or Qualified Income Trust?
A Qualified Income Trust, or QIT, is a specialized irrevocable grantor trust that Medicaid requires in some circumstances. A QIT is also known as a Miller Trust.
Under Medicaid rules, if a Nursing Home resident has a monthly gross income of over $2,022, [valid for 2011] the Nursing Home resident’s income is excessive under Medicaid eligibility rules and the resident is thus not Medicaid eligible.
But Medicaid does know that an income of $2,023 a month is really not enough to pay for Nursing Home Care. Therefore, Medicaid permits the QIT process to get around this problem.
A QIT account is set up at a bank. Income deposited directly into this trust account is considered not to have been received by the Nursing Home resident. Therefore, a sufficient portion of the resident’s income must be deposited into the QIT every month to keep the resident’s income [which is deposited into the Nursing Home resident's regular checking account] below $2,022.
Medicaid does not consider the money in the QIT to belong to the resident – it belongs to the trust. Therefore, the Nursing Home resident now qualifies for Medicaid!
The money in the QIT needs to be paid to the Nursing Home each month, along with most of the rest of the resident’s income before Medicaid will pay the additional money needed to cover the monthly cost of care.
At death, any money remaining in the account, which should be almost nothing in most cases, must be paid to the Kentucky State Treasurer.
The QIT threshold is adjusted every January 1 and is three times the SSI poverty level for a single individual.
We prepare Qualified Income Trusts for our clients.
If you have questions or would like to schedule a free consultation with us, please feel free to contact us, we’re here to help.