Section 1

What Is a Qualified Income Trust?

A Qualified Income Trust (QIT), commonly called a Miller Trust after the federal court case Miller v. Ibarra (D. Colo. 1990) that first established the concept, is a specific type of irrevocable trust created solely to enable a person whose income exceeds Florida’s Medicaid income limit to qualify for Medicaid long-term care benefits.

The legal authority for the QIT comes from federal law: 42 U.S.C. §1396p(d)(4)(B). This statute carves out an exception to the general rule that a person’s income disqualifies them from Medicaid — if that income is placed into a properly structured irrevocable trust before Medicaid eligibility is determined, it is not counted against the income cap.

A QIT is not an asset protection trust. It does not protect money from Medicaid. It does not allow the senior to keep their income while receiving Medicaid. Its sole function is to act as a monthly conduit — income flows in, authorized expenses flow out, and the remainder goes to the nursing facility as the patient’s contribution. Florida Medicaid is reimbursed from anything remaining in the trust at the senior’s death.

Florida’s Medicaid Income Cap — The Trigger for a QIT

Florida is an “income cap” state for Medicaid long-term care purposes. This means that unlike many states which allow applicants to “spend down” excess income on medical expenses to reach Medicaid eligibility, Florida uses a hard dollar threshold. If a Medicaid applicant’s gross monthly income exceeds the cap by even $1, they are categorically ineligible for Florida Medicaid long-term care benefits — unless they establish a QIT.

How the Income Cap Is Calculated

The Florida Medicaid income limit for long-term care (nursing home and waiver programs) is set at 300% of the SSI Federal Benefit Rate, which is adjusted annually with Social Security cost-of-living adjustments. For 2025, this cap is approximately $2,901 per month (individual). This figure changes January 1st of each year — always verify the current cap with the Florida Department of Children and Families or an elder law attorney at the time of application.

What Counts as Income for the Cap?

Florida Medicaid counts virtually all forms of income toward the cap:

• ✓Social Security retirement and disability benefits (SSDI, SSA)
• ✓Pension and retirement plan distributions (private pensions, government pensions)
• ✓Veterans benefits (with some exceptions for aid and attendance)
• ✓Required Minimum Distributions (RMDs) from IRAs and 401(k)s
• ✓Railroad Retirement benefits
• ✓Rental income (net of expenses)
• ✓Annuity payments

How a Florida QIT Works Each Month

Once established, a QIT operates on a rigid monthly cycle. The trustee — typically a family member — must follow this cycle without fail every single month for as long as the beneficiary is on Medicaid. This is the most operationally demanding aspect of QIT administration and the reason trustees must be organized, reliable, and willing to commit to the responsibility.

The Priority Payment Order — What the Trustee May Pay

Florida Medicaid rules specify that QIT disbursements must be made in a specific priority order, and only for specifically authorized categories. The trustee has no discretion to pay expenses outside this list. Payments must be made in priority order — lower-priority items are only paid if sufficient funds remain after higher-priority items.

Who Can Serve as Trustee of a Florida QIT?

The trustee of a Florida QIT is the person who manages the trust account month to month — receiving income, making authorized payments, paying the nursing facility, and keeping records. This is a real responsibility that requires organization, reliability, and willingness to follow Florida Medicaid rules without deviation.

Eligible Trustees

• ✓An adult family member — most commonly an adult child, sibling, or spouse of the Medicaid applicant. This is the most common choice. The trustee does not need to be a Florida resident, but must be willing and able to manage a bank account and make monthly payments.
• ✓A licensed Florida attorney — particularly useful when no trustworthy family member is available or when the situation is complex.
• ✓A bank or trust company — corporate trustees are reliable but charge fees; generally only used for large or complex estates.
• ✓A court-appointed guardian — if the applicant has been declared legally incapacitated and a guardian appointed, the guardian may serve as trustee with court approval.

Who CANNOT Be Trustee

• ✗The Medicaid applicant or beneficiary — the QIT grantor/beneficiary cannot be their own trustee. This is a fundamental QIT requirement. The trust must be administered by someone other than the person receiving Medicaid benefits.
• ✗Anyone under 18 years old — the trustee must be a competent adult.
• ✗Anyone who has been convicted of financial crimes — trustees have a fiduciary duty to act in the beneficiary’s best interest.

Trustee Duties — What the Job Actually Requires

Before agreeing to serve as trustee, a family member should understand what the role requires on an ongoing monthly basis:

• 1Confirm all income has been deposited into the QIT account at the start of each month
• 2Calculate the Personal Needs Allowance and any other authorized deductions
• 3Pay health insurance premiums if applicable
• 4Calculate the correct patient pay amount (total income minus authorized deductions)
• 5Write a check or initiate a payment to the nursing facility by the required date
• 6Record all transactions in a ledger or spreadsheet
• 7Respond to any Florida DCF requests for trust records
• 8Notify Florida DCF immediately of any change in the beneficiary’s income

What the Trust Document Must Include Under Florida Law

A Florida Qualified Income Trust must meet specific requirements to be accepted by the Florida Department of Children and Families (DCF) during the Medicaid eligibility process. A defective or incomplete trust will be rejected, delaying Medicaid eligibility and potentially resulting in the family paying the full nursing home rate while the trust is corrected.

Required Elements

• ✓Irrevocability clause: The trust must explicitly state that it is irrevocable and cannot be amended, modified, or revoked by the grantor or beneficiary. Only a court of competent jurisdiction may modify it.
• ✓Sole beneficiary clause: The Medicaid applicant must be the sole beneficiary during their lifetime. No other person may receive distributions from the trust during the applicant’s life.
• ✓Income-only restriction: The trust must receive only income — no assets or lump-sum transfers. Only the monthly income of the Medicaid applicant flows through the QIT. Any asset transfer into the trust would be subject to the Medicaid 5-year lookback penalty period.
• ✓Medicaid payback provision: The trust must name the Florida Agency for Health Care Administration (AHCA) as the first remainder beneficiary upon the beneficiary’s death, to the extent Medicaid benefits were paid on their behalf. This is non-negotiable — it is required by federal law.
• ✓Named trustee and successor trustee: The trust must identify the trustee by name and designate at least one successor trustee.
• ✓Trust purpose statement: The document must clearly state that the trust is established for the purpose of qualifying the beneficiary for Florida Medicaid long-term care benefits under 42 U.S.C. §1396p(d)(4)(B).
• ✓Authorized disbursements: The trust should enumerate the specific disbursements authorized under Florida Medicaid rules and specify the priority order.
• ✓Proper execution: The trust must be signed by the grantor (or, if incapacitated, by a duly authorized agent under a valid Durable Power of Attorney) in the presence of two witnesses and a Florida notary public.

Who Creates the QIT?

The QIT is created by the grantor — the Medicaid applicant. If the applicant lacks mental capacity to sign legal documents, a person holding a valid Florida Durable Power of Attorney with authority to create trusts may establish the QIT on the applicant’s behalf. This is common for seniors with dementia or Alzheimer’s disease. The power of attorney must specifically authorize the creation of trusts — a general financial DPOA may not be sufficient. If no valid DPOA exists, the family may need to seek court guardianship to establish the QIT, which significantly delays the Medicaid application.

How to Set Up a Florida QIT — Step by Step

The setup process must be completed before the Medicaid application is approved. Medicaid will not approve eligibility first and allow the trust to be created afterward. The timeline matters — nursing home bills accumulate daily, and every day of delay costs the family money.

1. 1

   Verify that a QIT is required

   Add up all sources of the applicant’s gross monthly income. Compare to the current Florida income cap ($2,901/month in 2025). If income exceeds the cap, a QIT is required. If income is below the cap, a QIT is not needed and should not be created unnecessarily.

2. 2

   Identify and confirm a trustee

   Select a trustworthy adult family member or other eligible person who understands the monthly obligations and agrees to serve. Confirm they are not the Medicaid applicant or beneficiary. Identify a successor trustee as well.

3. 3

   Prepare the trust document

   The QIT document must meet all Florida Medicaid requirements (see Section 6). The JusticeXpress QIT form, available on this page, is specifically drafted for Florida Medicaid compliance. Alternatively, an elder law attorney can draft the document. The trust must be tailored to the specific grantor, trustee, income sources, and AHCA payback language.

4. 4

   Execute the trust document

   The grantor (or their authorized DPOA agent) signs the trust in the presence of two adult witnesses and a Florida notary public. Both witnesses must be adults who are not named in the trust as beneficiaries. The notary completes the notarial certificate. Make multiple original counterparts — you will need copies for the bank, Medicaid, and the nursing facility.

5. 5

   Open a dedicated QIT bank account

   The trustee opens a checking account at a Florida bank or credit union in the name of the trust (for example: “John Smith Qualified Income Trust, Mary Smith, Trustee”). Bring the signed trust document and a copy of the grantor’s Social Security card. The account must be completely separate from any personal or household account.

6. 6

   Redirect income into the QIT account

   Contact Social Security Administration, the pension administrator, and every other income source to redirect direct deposit payments to the new QIT bank account. Keep copies of all change-of-address/direct-deposit change confirmations. Note: SSA direct deposit changes can take 1–2 payment cycles to take effect.

7. 7

   Submit the trust with the Medicaid application

   Include a certified copy of the fully executed QIT document with the Florida Medicaid application submitted to the Department of Children and Families (DCF). The caseworker will review the trust for compliance. A defective trust will be rejected and Medicaid eligibility will be delayed. Ensure the AHCA payback language is correct before submission.

8. 8

   Begin monthly QIT administration

   Once Medicaid is approved, the trustee begins the monthly cycle: confirm all income is deposited, make authorized deductions, and pay the patient pay amount to the nursing facility each month. Keep records of every transaction.

Common QIT Mistakes That Cause Medicaid Denials or Delays

• !Omitting the AHCA payback provision. This is the most common fatal error. Florida Medicaid will not accept a QIT that does not name Florida AHCA as the first remainder beneficiary after death. The specific statutory language must appear in the document.
• !Making the Medicaid applicant their own trustee. The grantor/beneficiary cannot administer their own QIT. Medicaid will reject any trust where the beneficiary retains control over the trust funds.
• !Depositing assets (not just income) into the QIT. The QIT may only receive monthly income. A lump-sum transfer of savings, a home, or other assets into the QIT constitutes a Medicaid-disqualifying transfer subject to the 5-year lookback period.
• !Not depositing all income every month. Partial deposits are not allowed. If even one income source (a pension, for example) is not routed through the QIT in a given month, the QIT may be considered invalid for that month, potentially disrupting Medicaid eligibility.
• !Using QIT funds for unauthorized expenses. Paying a family member’s expenses, the applicant’s personal debts, or any expense not on the authorized list constitutes a misappropriation that must be repaid and could constitute elder financial abuse.
• !Not having a proper DPOA before establishing the QIT for an incapacitated person. If the applicant cannot sign the trust and the DPOA does not specifically authorize trust creation, the family may be forced into a guardianship proceeding before the QIT can be established.
• !Waiting until after Medicaid approval to establish the QIT. The trust must be established and operational before Medicaid eligibility is approved, not after.

QIT and the Florida Medicaid Estate Recovery Program

By federal law, every state must operate a Medicaid Estate Recovery Program (MERP). Florida’s program is administered by the Florida Agency for Health Care Administration (AHCA). Under MERP, Florida Medicaid has the right to recover the benefits it paid on behalf of a Medicaid recipient from the recipient’s estate after death.

What Happens to the QIT at Death?

When the QIT beneficiary dies, any funds remaining in the QIT account are distributed in this order:

• 1First: Florida AHCA is reimbursed for the total Medicaid benefits paid on the beneficiary’s behalf during their lifetime, up to the amount remaining in the trust. In most cases, the QIT account balance at death is small (often near zero) because funds are fully distributed each month.
• 2Second: Any allowable administrative expenses of the trust are paid.
• 3Third: Any remaining balance is distributed to the named remainder beneficiaries (usually family members) named in the trust.

When Is a QIT Not Enough? — Asset-Based Medicaid Eligibility

A QIT addresses the income side of Medicaid eligibility only. Florida Medicaid long-term care eligibility also requires that the applicant’s countable assets be below $2,000 (for a single person). A QIT does nothing to reduce or protect assets.

If the applicant has excess assets as well as excess income, they face a two-part problem: the QIT resolves the income problem, but asset eligibility must be addressed separately through Medicaid-compliant spend-down strategies, which may include:

• →Spending down on allowable expenses (pre-paying funeral costs, paying off a mortgage, home improvements)
• →Purchasing an irrevocable Medicaid-compliant annuity
• →Transferring assets to a community spouse in a married couple situation (subject to Medicaid spousal resource allowance rules)
• →Medicaid-compliant gifts to family members (subject to the 5-year lookback penalty period — this strategy requires very careful timing)

Asset-based Medicaid planning is complex and highly fact-specific. The 5-year lookback period for asset transfers means that mistakes made more than 5 years before the Medicaid application date are irrelevant, but transfers within the lookback window can result in penalty periods of months or years during which Medicaid pays nothing. This area of planning requires the guidance of a licensed Florida elder law attorney.