How to set up a Qualified Income Trust in Florida

Step 1: Confirm the trust is needed

A QIT is needed only when the applicant's gross monthly income is over Florida's income limit for long-term care Medicaid. DCF's QIT policy covers nursing home Medicaid (the Institutional Care Program), institutional hospice, the home and community-based services waiver at home or in assisted living, and PACE. Add up every source of income before anything is withheld, including the Medicare premium. The free QIT Check on this site does that comparison in three questions; our guide Do I need a QIT? explains each part.

Step 2: Decide who signs

DCF's guidelines for reviewing income trusts accept a trust signed by the applicant; by the applicant's spouse; by someone with legal authority to act for the applicant or the spouse, such as an agent under a power of attorney or a guardian; or by someone acting at the applicant's or the spouse's direction or request.

When an attorney licensed in Florida sets up the trust, DCF presumes the person who signed had the authority to do it. Otherwise DCF asks for the power of attorney or guardianship papers and sends them to its legal counsel with the trust. No power of attorney is needed when the spouse signs.

If the applicant cannot sign and the only document is a power of attorney from another state, read it for authority to create a trust before anyone signs. Our guide to out-of-state powers of attorney explains why.

Step 3: Make sure the trust says what it must

DCF treats a trust as a qualified income trust only if it was established for the benefit of the applicant, it is irrevocable, it holds only the applicant's income, and it says the State receives the balance at the applicant's death up to the total Medicaid paid for their care. A trust may allow amendment, as long as the amendment power does not include the power to revoke.

The trust does not have to state a monthly deposit amount; DCF checks the bank records instead. It may name "the State" rather than the State of Florida. It must be signed and dated: DCF's guidelines treat an unsigned or undated document as no trust at all. Those guidelines also note that an income trust does not need the two witnesses a will requires.

Step 4: Open the trust bank account

Open an account in the name of the trust, with the trustee as signer. In our practice the account uses the applicant's Social Security number, not a separate employer identification number. Choose an account without monthly fees where possible.

Only the applicant's income may go into this account. A trust that holds the applicant's savings, or anyone else's money, is not a qualified income trust, and DCF then counts the income as if the trust did not exist.

Step 5: Fund it in the same month

Each month, enough income has to move into the trust account, in the month the income is received, to bring the income left outside the trust within the limit. This has to happen in every month Medicaid is requested, which can mean funding the trust before DCF has approved it. Income cannot be excluded until it is in the trust, and a trust cannot be funded after the fact for a month that has passed.

Social Security cannot be paid straight into the trust; federal law forbids directing those benefits into a trust. It is paid to the applicant's own account, and an automatic transfer moves the amount to the QIT the same month.

Step 6: Give the trust to DCF

File the signed trust with the Medicaid application. The eligibility specialist forwards every income trust through the Region or Circuit Program Office to the Circuit Legal Counsel, who decides whether it meets the requirements. When the decision comes back, DCF processes the application and sends a notice of eligibility and patient responsibility. DCF also sends a copy of the approved trust to the Agency for Health Care Administration's third-party liability contractor on Form CF-ES 2356, so the State's claim at death is on file.

If the trust does not work

If the income left outside the trust is still over the limit, the applicant is not eligible for long-term care Medicaid on income. DCF's guidelines direct the eligibility specialist to explain the problem and enroll the person in the Medically Needy program instead, if they meet its other requirements. Medically Needy is not long-term care coverage, so fixing the deposit quickly matters.

Questions

Can the QIT be set up before the Medicaid application is filed?

Yes, and it usually should be. The trust has to be signed, its account open, and income deposited in each month for which Medicaid is requested, and DCF's policy expects deposits to begin even before its legal counsel approves the trust.

Does the trust have to say how much will be deposited each month?

No. DCF's review guidelines say the trust does not have to name a monthly amount. What matters is that the bank records show enough income deposited each month to bring the income outside the trust within the limit.

Who reviews the QIT at DCF?

The Circuit Legal Counsel, after the eligibility specialist forwards the trust through the Region or Circuit Program Office. DCF processes the Medicaid application once that review comes back.