Characteristics of the Trust

Only the person’s pension, Social Security and other income may be placed in a QIT. The person’s resources may not be deposited into a QIT account. Since the QIT has no corpus as that term is generally understood in the trust field, the need for much of the standard trust language about management of the trust principal is eliminated, and the language of the written trust instrument may be shortened accordingly. A person applying for Medicaid may divert all their income into a QIT, or if they have income from multiple sources, divert only the income from certain sources. All income received from the source must go into the QIT.

VA aid and attendance benefits, housebound allowances, and reimbursements for unusual or continuing medical expenses are exempt from both eligibility and co-payment. If a person deposits these types of payments into a QIT account, the income is countable for the co-payment budget. If a person receives a VA pension that includes aid and attendance benefits, housebound allowances, or reimbursements for unusual or continuing medical expenses, the person may separate the aid and attendance benefits, housebound allowances, or reimbursements for unusual or continuing medical expenses from the VA pension before depositing the VA pension into the QIT account. Aid and attendance benefits, housebound allowances, or reimbursements for unusual or continuing medical expenses are not income for Medicaid eligibility determinations.

The QIT must be irrevocable. Per CMS, a trust instrument that indicates the trust is irrevocable but allows the trust to be revoked through court action does not meet the irrevocability requirement.

The QIT instrument may provide for successor or co-trustees, waive bond, and incorporate the Texas Trust Act provisions for the powers of the trustees. The statutory authority for a QIT is silent on who may serve as the trustee. But, HHSC recommends that the beneficiary not be a trustee. The beneficiary may lose Medicaid eligibility if all the trust requirements are not met.

The QIT instrument must have a reversion clause. The clause says that at the death of the trust beneficiary, the state of Texas is paid the remaining funds from the trust account. The amount is up to the full amount of Medicaid assistance provided to the beneficiary and not repaid in another way. Payments made to HHSC as the residuary beneficiary should be in whole dollar amounts and by cashier's check, money order or personal check. These payments are receipted on Form H4100, Money Receipt .

A QIT instrument must require that the trustee pay:

a monthly personal needs allowance to the beneficiary;

court-ordered guardianship fees;

a sum enough to give a minimum monthly maintenance needs allowance to an existing spouse of the beneficiary; and

the cost of medical assistance given to the beneficiary, from the funds remaining after the beneficiary’s death.

The income must be deposited into the QIT account the same month it is received. The trustee must make distributions from the QIT account by the last day of the following month.

HHSC does not allow deductions for trust administration costs when determining the amount of the beneficiary's income that must be applied to the cost of the beneficiary's medical assistance. The amount that must be applied to the cost of the beneficiary's medical assistance is based on the beneficiary's total income, including any income that is not diverted to the QIT. If there are funds in the QIT account after the above distributions are made, the funds may be applied to the cost of trust administration.

Income paid from the QIT account to purchase institutional services, home and community-based waiver services, or other medical services for the beneficiary is not countable income for eligibility purposes. Income paid from the QIT account directly to the beneficiary or otherwise spent for their benefit is countable income for eligibility purposes.