Estate planning provides people with many different perks. Aside from peace of mind and shielding assets from taxes or lawsuits, setting up an estate plan can offer other advantages. For example, some people can become eligible for crucial programs such as Medicaid by creating a qualified income trust.
Before moving forward with any type of estate plan, it is vital for people to review their options carefully.
Can a trust affect Medicaid eligibility?
The Texas Health and Human Services Commission provides helpful information on qualified income trusts and Medicaid eligibility. Also known as Miller trusts, qualified income trusts can benefit older adults who wish to secure benefits from Medicaid for the Elderly and People with Disabilities (MEPD).
In order to receive benefits from this program, one’s countable income cannot exceed a certain limit. However, some Texans require care in nursing homes and cannot cover these expenses even though their income exceeds Medicaid’s limit. By successfully setting up a qualified income trust, some people can divert their income into the trust in order to become eligible for Medicaid.
What can one put in a qualified income trust?
The HHSC points out that applicants can only put certain forms of income in qualified income trusts, such as Social Security and pension income. Applicants do not have the ability to put their resources in this trust. Moreover, if one decides to include a particular type of income in their trust, all of the income from that source must go into the qualified income trust.
Medicaid can serve as a lifeline for many older adults, and it is pivotal for those who wish to secure benefits to review whether a qualified income trust could affect their eligibility.