Paying for expensive nursing home or in-home care, especially on a long-term basis, can quickly drain a senior’s bank account. In the Atlanta, Georgia area in 2020, the average cost for a year of care in a nursing home totals $83,403, while the average cost of in-home care can amount to $49,674.
Creating an irrevocable Qualified Income Trust (QIT) can allow Georgia’s seniors to tap into financial assistance from Medicaid even when their monthly income exceeds the threshold of Medicaid eligibility. The QIT (also known as a Miller Trust) impacts only the senior’s income; it has no effect on the senior’s savings or other assets.
Georgia is an “income cap” state, meaning that individuals whose income is greater than the state’s monthly income cap ($2,382 in 2021) are ineligible for Nursing Home Medicaid and will find themselves personally responsible for their long-term care expenses. By properly funding a QIT, Medicaid allows an individual to become eligible for Medicaid even though that individual’s income exceeds the income cap.
Before you begin, please note that you only need a QIT if you are applying for Nursing Home Medicaid or a Medicaid waiver benefit. A QIT is not to be used as part of anyone’s estate planning and is not necessary for Medicare eligibility, only Medicaid.
To create the QIT, the senior, the senior’s guardian or conservator, or the senior’s agent under a power of attorney can complete the QIT Agreement. In the QIT Agreement, you will need to name a Trustee. The Trustee can be any person except the senior. The senior needs to select someone who is reliable, trustworthy, and who can balance a checkbook to serve as the trustee.
Once the QIT Agreement has been completed and signed, then the Trustee takes the QIT Agreement to a bank to open a bank account in the name of the Trustee. The account would be titled “John Doe, as Trustee for the Jane Smith Qualified Income Trust.”
Most people are reluctant to serve as trustee of a QIT because they become intimidated when they hear the term “trust.” I typically advise clients to think of a QIT as a funky bank account with a handful of specific rules. The first couple of months of managing the trust can be confusing, but usually the trustee has the pattern down by month three.
We have included a link to a QIT Worksheet that will help the trustee determine the minimum amount that the trustee must deposit into the QIT each before the end of each month.
Terminating a QIT
The QIT terminates when the beneficiary or senior dies. At that point, the Trustee forwards any remaining funds in the QIT to the Department of Community Health (DCH) to repay any expenses DCH made on behalf of the senior during the senior’s lifetime. In the unlikely event that there is money remaining after DCH is repaid, the QIT account’s remaining balance is distributed to the senior’s named beneficiaries.
If you want to establish a QIT, fill out the first form (The Irrevocable Medically Needed/Qualified Trust Agreement). Refer to the Georgia Senior Legal Hotline – 404-657-9915 for any questions. Any senior in the state may utilize the hotline, regardless of income.
A few reminders:
At Weinberg Elder Law, we receive a number of phone calls from people who want to hire us to create a QIT to help a senior or other individual with a disability qualify for Medicaid. The good news is that, in Georgia, establishing and maintaining a QIT is a simple, straightforward process. You do not need to hire an attorney to help you create a QIT. The DCH, the entity that oversees Medicaid, has created a trust form for you to use and a guide to explain how to fund and manage the QIT. On this page, we have included links to the trust document form, called The Irrevocable Medically Needed/Qualified Income Trust Agreement (the QIT Agreement), and to DCH’s guide, called The Qualified Income Trust: A Guide for Trustees (the QIT Guide).