What is an “income cap trust?  

An income cap trust is a special form of a trust. Its sole purpose is to qualify someone for Medicaid long term care services who would otherwise not be eligible because his income is more than $2,094 per month. A trust has three parties to it – the grantor who signs the trust, the beneficiary who benefits from the trust, and the trustee who administers the trust. Usually, the person who needs Medicaid is the grantor and is also the lifetime beneficiary. The trustee is usually a family member or friend. 

How does an “income cap trust” work? 

If you need Medicaid help, you put all of your monthly income into the trust bank account. No income from anybody else and none of your other property are put into the trust account. The trustee pays the money out of the trust account toward certain monthly expenses as required by Medicaid law. For example, each month the trustee pays: an allowance for your personal needs; room and board (unless you are in a nursing home); an allowance for your spouse if you are married; health insurance premiums, if you have any; and, a payment toward the cost of your care. 

What do we require to open an 'income cap trust?

In order for us to open an income cap trust, the trustee must provide us with a completed and signed income cap trust certification.