AWCA Resource Center
AWCA Resource Center

Retirement Planning

Medicaid Trusts

This content is provided for informational purposes only. For specific legal advice, please consult with a qualified professional or an official government agency.

A Medicaid Trust is a legal instrument designed to help seniors or individuals with disabilities protect and manage their assets while maintaining eligibility for government benefits. It is essential to select the appropriate trust type based on your specific objectives and  circumstances.

Primary Types

  • Revocable Trusts: Offers high flexibility as the grantor can modify or terminate the trust at any time. While useful for probate avoidance, they are generally not suitable for Medicaid asset protection because the assets are still considered countable resources in eligibility assessments.
  • Irrevocable Trusts: Once established, these trusts generally cannot be modified or revoked. While any portion that could potentially be paid to the grantor may still be counted as an asset, a properly structured Irrevocable Trust is highly effective for Medicaid planning and asset protection.
  • Pooled Trusts: Managed by non-profit organizations, these trusts are available to individuals with disabilities of all ages. Assets from multiple beneficiaries are pooled for investment purposes to increase returns, though individual sub-accounts are maintained. In New Jersey, if your income exceeds the Medicaid limit, a Qualified Income Trust (QIT/Miller Trust) is required. Pooled trusts are primarily used to safeguard a disabled person’s assets to enhance their quality of life without disqualifying them from Medicaid.
    • Individuals 65 or older should consult a professional before transferring assets to a pooled trust, as a Look-back Penalty may apply.
  • Qualified Income Trust (QIT / Miller Trust): In New Jersey, if an individual’s monthly income exceeds the institutional Medicaid limit ($2,982 as of 2026), the excess income must be deposited into a QIT to maintain eligibility. 

    * Limits are subject to annual update; check the latest NJ DHS standards.

Benefits

  • Asset Protection: Prevents the depletion of your estate by high medical or long-term care costs, establishing a foundation for passing assets to the next generation.
    • Medicaid may seek to recover costs for services provided to individuals 55 and older from their estate after death. 
      • Recovery is deferred if there is a surviving spouse, a child under 21, or a disabled child. A properly established trust helps shield assets from this recovery process.
  • Maintenance of Eligibility: Assists in receiving necessary welfare benefits while complying with Medicaid’s strict asset and income limitations.
    • 2026: Individual Asset Limit $2,000 | Income Limit $2,982 per month. (Subject to annual NJ DHS updates).
  • Professional Management: Especially in the case of Pooled Trusts, professional non-profits manage the assets, ensuring transparency and stability.
  • Long-Term Care Planning: The Look-back Period involves a 60-month (5-year) review of asset transfers prior to a long-term care Medicaid (MLTSS) application. Transfers made for less than Fair Market Value during this window will trigger a Penalty Period (delay in benefits). Advance planning is essential.

Implementation Procedures

  1. Professional Consultation: Work with a specialized attorney to analyze your financial situation and Medicaid eligibility.
  2. Determination of Trust Type: Select the optimal trust model based on asset size, health status, and family needs.
  3. Drafting and Notarization: Legal requirements vary by trust type. Notarization is recommended for standard trusts; a QIT requires DHS-approved templates and the opening of a dedicated bank account.
  4. Funding the Trust: Complete the process by retitling assets (e.g., real estate, accounts) into the name of the trust.

Contact

AgencyServices ProvidedContact Information
NJ ADRC
(Aging & Disability Resource Connection)		Service connection and counseling for seniors, individuals with disabilities (18 and above), and family caregivers by county.1-877-222-3737
(Connects automatically to your local county office)
Bergen County Division of Senior ServicesInformation, assistance, and referrals for legal services.One Bergen County Plaza
2nd Floor
Hackensack, NJ 07601
201-336-7400
seniors@bergencountynj.gov
NNJLS
(Northeast New Jersey Legal Services)		Free legal aid for low-income residents, seniors, and the disabled (subject to eligibility).190 Moore Street, Suite 100,
Hackensack, NJ 07601
201-487-2166
NNJLS.ORG
LSNJ
(Legal Services of New Jersey Hotline)		Statewide legal hotline providing free legal advice and information.1-888-576-5529
lsnjlawhotline.org

References

Resources

Retirement Planning