How can my son spend money in his QIT?


Q. My son was released from a nursing home after two years and his wonderful wife took him home. We tried to get him approved for Medicaid. His disability income was over the limit so an attorney had him set up a QIT account. Money went from his account to the QIT and then to the facility. Now that he is out, how do we find out what he can spend this money on? We don’t want to make any mistakes because he is on dialysis with end stage renal disease and we couldn’t possibly afford his care without Medicaid.
— Trying to help

A. We’re sorry to hear about these challenges for your son.

But we’re glad he has you trying to help.

The Qualified Income Trust (QIT) is a trust that allows someone to qualify for Medicaid who would not otherwise qualify for Medicaid because of the income limits to qualify, said Shawn McClelland, a partner in the Trusts and Estates and Tax Law Practice Groups with Mandelbaum Barrett in Roseland.

Essentially, the income that would otherwise disqualify a person from Medicaid is paid to a trust which then forwards those funds to, in this case, a nursing home, he said.

The terms of a QIT should be set forth in a separate trust document which should be carefully reviewed, McClelland said.

Such a document would control the use of funds held in the trust.

“Generally, those terms include the use of funds to supplement, and not replace, those services provided by Medicaid,” he said. “Some examples for what assets of the trust may be used for when a person is no longer living in a facility include monthly maintenance of the beneficiary like personal care items, haircuts, and clothing — socks are a big one.”

Funds can also be used to augment/upgrade provided items such as motorized wheelchairs and mechanical beds, he said.

Medicaid will also allow for the payment of medical expenses. Medicaid may cover normal dentistry but not cosmetic dentistry. Money from the trust can be used for cosmetic dentistry, he said.

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This story was originally published on Aug. 17, 2023. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.