What Is a Qualified Income Trust?

Many Florida seniors who need nursing home care find themselves in a frustrating situation: they require Medicaid to cover the cost of care, but their monthly income is just slightly above the Medicaid limit. Even though they cannot realistically afford private nursing home bills that can exceed $10,000 a month, they are told they don’t qualify for help from Medicaid because their income is “too high.” Fortunately, there’s a legal solution available—the Qualified Income Trust (QIT).

At Shalloway & Shalloway, P.A., we help families afford long-term care through a variety of planning tools that best match their particular situation. Here’s what you need to know about Qualified Income Trusts. Contact our office to explore your options with an experienced and dedicated West Palm Beach Medicaid planning attorney.

Medicaid Income Rules in Florida

Medicaid is a joint federal and state program that helps low-income individuals afford healthcare, including long-term care in skilled nursing facilities. To qualify for Medicaid’s Institutional Care Program (ICP) in Florida, applicants must meet strict income and asset requirements.

For 2025, the income cap for Medicaid long-term care in Florida is $2,901 per month for a single applicant. If your gross monthly income exceeds this amount, even by a dollar, you are considered “over income” and ineligible, unless you take action with an acceptable tool such as a Qualified Income Trust.

This rule often creates what’s known as the “Medicaid gap”: seniors have too much income to qualify for Medicaid but not nearly enough to pay privately for a nursing home.

What Is a Qualified Income Trust?

A Qualified Income Trust—sometimes called a Miller Trust—is a special type of irrevocable trust that allows individuals with income above the Medicaid cap to qualify for benefits.

The trust works like a restricted bank account, established in accordance with federal and state requirements, into which the applicant’s excess monthly income is deposited. Once the funds are placed into the QIT, they are no longer counted as available income for Medicaid eligibility purposes. This allows the applicant to “pass” the income test and qualify for benefits.

How a Qualified Income Trust Works

Here’s a simplified example:

Suppose Mary, a Florida resident applying for Medicaid to cover her nursing home care, receives $3,200 per month in Social Security and pension income. The Medicaid income limit is $2,901, so she is over the limit by $299 and would normally be denied.

After setting up a Qualified Income Trust, Mary deposits at least $299 (the “excess” income) into the QIT each month. This makes her eligible for Medicaid, because the income above the cap is no longer counted against her.

Once in the trust, the funds are used to pay for the resident’s patient responsibility (the portion of income that must go toward the cost of care) and other allowable expenses as directed by Medicaid rules. Any remaining nursing home costs are then covered by Medicaid.

Key Requirements of a QIT

To be valid under Florida Medicaid rules, a Qualified Income Trust must meet specific requirements:

• Irrevocability: The trust cannot be canceled or altered once established. Funds placed into the trust can only be used for qualified purposes.
• Proper setup: It must be drafted in accordance with federal and state law, typically by an elder law attorney.
• Trustee: Someone—often a spouse, child, or trusted advisor—must serve as trustee to manage the account.
• Funding: The applicant must deposit enough income each month to bring their countable income below the Medicaid cap.
• Medicaid payback: Upon the Medicaid recipient’s death, any funds remaining in the trust must first be used to repay Medicaid for benefits provided.

Common Misunderstandings About QITs

Many families are unfamiliar with QITs and may assume they’re more complicated than they are. Here are some clarifications:

• You don’t have to deposit all income. Only the amount that puts you over the limit needs to go into the trust, though some choose to deposit their entire income to simplify administration.
• It doesn’t reduce assets. A QIT only solves the income problem. Applicants must still meet Medicaid’s asset test (no more than $2,000 in countable assets for an individual).
• It doesn’t eliminate patient responsibility. The resident must still contribute most of their monthly income toward the cost of care, keeping only a small personal needs allowance. The QIT just makes them eligible for Medicaid to pay the rest.

Why You Need Legal Guidance

While the concept of a Qualified Income Trust is straightforward, creating one that complies with Medicaid’s strict requirements can be tricky. A poorly drafted or improperly funded trust can result in a denial of benefits.

An experienced elder law attorney will:

• Draft the trust in compliance with Florida and federal law.
• Help select a trustee and provide guidance on how to administer the account.
• Ensure the proper amount of income is deposited each month.
• Coordinate the QIT with other Medicaid planning tools to protect assets and maximize eligibility.

At Shalloway & Shalloway, we’ve helped countless families in West Palm Beach navigate the Medicaid application process and use mechanisms like QITs to secure essential benefits.

Protecting Care, Preserving Dignity

The Qualified Income Trust is one of the most powerful tools available for Florida seniors who need nursing home care but have income above the Medicaid cap. Without it, many families would be forced to pay unaffordable nursing home bills or risk losing access to care altogether. With it, applicants can qualify for Medicaid while ensuring their income is used in a way that complies with program rules.

If you or your loved one is struggling with the Medicaid income cap, don’t assume you’re out of options. With the right legal guidance, a QIT can open the door to vital benefits and peace of mind.

In West Palm Beach, contact Shalloway & Shalloway, P.A. today to learn more about Qualified Income Trusts and how we can help you protect your eligibility for Medicaid while securing the care you need.