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MISSISSIPPI DIVISION OF MEDICAID LONG TERM CARE INCOME TRUST – HELP SHEET
Long Term Care Income Trust Help Sheet, Revised June 2020 Page 4
Termination of an Income Trust: 15. An Income Trust terminates at the individual’s death, when Medicaid eligibility terminates or when the trust is no longer necessary or the trust is otherwise terminated. The need to terminate an Income Trust prior to the individual’s death may occur in the following situations:
• The individual’s recurring monthly income increases to an amount above the private pay cost for the facility in which the individual resides which results in the disallowance of an Income Trust.
• The individual’s recurring monthly income decreases to an amount below the Medicaid institutional limit, meaning an Income Trust is no longer needed in order for the individual to qualify for Medicaid based on income.
• Medicaid state or federal policy changes regarding how certain income must be counted resulting in the disallowance or the need for an Income Trust.
• The individual is discharged from the nursing facility resulting in the disallowance of a Long Term Care Income Trust in order to qualify for Medicaid
At the time an Income Trust is terminated, all amounts remaining in the Income Trust must be paid to the Division of Medicaid up to an amount equal to the total medical assistance paid by the Division of Medicaid on behalf of the individual that has not previously been paid to the Division of Medicaid. The Trustee will be notified in writing of any remaining trust funds that are due and payable to the Division of Medicaid. An Income Trust is a very simple trust that accomplishes the specific goal of receiving income and disbursing it for the sole purpose of allowing an individual in a nursing facility with income in excess of Medicaid income limits to qualify for Medicaid. It is not intended to be a complex fiduciary trust. For more information, attorneys drafting an Income Trust may contact the Division of Medicaid’s Legal Unit at (601) 359-6050.