How do you move income into a Qualified Income Trust?

Income is moved into a qualified income trust by transferring the income into the trust bank account before the last day of the month. If you wait until after the last day of the month, the income becomes countable for Medicaid purposes.

A qualified income trust (QIT) is used to help disabled individuals qualify for long-term care benefits under Medicaid, such as ICP benefits. Any income moved into the trust is not counted as income for Medicaid purposes when the applicant is applying for long-term care programs.

Moving income into a QIT is a simple process. The first step is to establish a bank account for the QIT (in the name of trustee, such as “John Smith, Trustee of the Doe Qualified Income Trust”). The second step is move the income received by the disabled beneficiary into the trust bank account before the end of the calendar month.

It is important to move the income before the end of the month in order for it to not be counted for Medicaid purposes (which is what you typically want). If you do not move the income over, that income could disqualify the QIT beneficiary from Medicaid benefits.

Creating a QIT can also be a painless process with the help of a special needs trust attorney. Look for an estate planning attorney that understands special needs trusts and Medicaid planning.