An individual, a spouse of the individual or a guardian of the individual can set up a trust account to place the income in that is over a certain limit to enable the individual to still be eligible for Medicaid or some other government program.
Set Up Medicaid Income Trust
The first step is to consult a lawyer that handles the elderly and a trust fund, if that is possible. The next step is to consult with the specialist to determine the amount of income and from where this income will be coming from, dividends, estates, employment etc. Once that is determined the amount chosen has to be placed in the trust every month with no exception. The account must be titled as an income trust account, with a trustee listed on the account. The income trust must be set up well before applying for Medicaid.
The Medicaid Income Trust must meet specific state requirements, must be approved by the Department of Children and Family Services. It must be irrevocable. The state will receive all remaining funds once the individual dies. The income must consist of only the individual who is the owner of the account. The trust paperwork must be signed and dated by the individual or their representative. A deposit must be made every month or the benefits will be taken away for the particular month that nothing was deposited. The income in the trust does not count toward the income cap but it is used to determine co-payments and other payments for medical services.
Each state has its own requirements for Medicaid Income Trust and anyone interested in setting up this fund keep in mind that it needs to be done well before applying for any type of government service. This is a great way to remain eligible for government programs and keep the over the cap income intact.