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What is an Income Cap Trust?
An Income Cap Trust serves the sole purpose of qualifying a person for Medicaid. Oregon in an “Income Cap” state. An Income Cap Trust beneficiary is eligible for Medicaid, but for the fact that their level of income is over the income cap. The Medicaid applicant works closely with the Senior and Disabled Services Division (SDSD) and the set up and administration of the Trust. It is most common to have an Income Cap Trust executed by the Medicaid recipient’s attorney-in-fact under a Power of Attorney. Upon the death of the Medicaid recipient, the state of Oregon is the first remainder beneficiary of the Trust. The Medicaid recipient is not allowed to be the Trustee of an Income Cap Trust. It is most common to have the Medicaid recipient’s spouse or adult child serve as Trustee. The only asset of the Income Cap Trust is the Medicaid recipient’s income. The Trust asset is ordinarily a checking account set up using the Trust’s Tax Payer ID Number. The Trustee then makes payments from the Trust checking account in accordance with the distribution formula in the Trust. Typically this is any where from two to five checks per month from the Trust Checking Account. If any changes occur with the Medicaid recipient’s income or distribution amounts, the Trustee should work closely with the Medicaid case worker at SDSD. The information we will require in order to begin working on Income Cap Trust is available in our FORMS section of this website. |
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Disclaimer: The information contained in pages found at www.broesderlaw.com are publications of Arant &
Broesder, LLC for general purposes only and should not be construed as legal advice or legal opinion on any
specific facts or circumstances. If you have specific legal questions, you are urged to consult your own
lawyer concerning your own situation.
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