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Income Cap Trusts                        

An Income Cap Trust is necessary when an applicant's gross income exceeds the limit of $2,349. Oregon adjusts this limit annually. The sole purpose of an Income Cap Trust is to qualify the applicant for Medicaid benefits. During the application process, the client meets with an attorney to establish the trust agreement, which includes schedules listing the applicant's income and authorized distributions.

Once established, the Trustee opens a bank account, deposits the recipient's income, and makes payments as directed in the trust agreement. Payments may include support for a spouse, funeral plans, medical expenses, and home maintenance during temporary absences. The Income Cap Trust ensures the Medicaid recipient's income is captured monthly, allowed distributions are made, and ends each month with a zero balance. The state of Oregon is named as the remainder beneficiary, and upon the recipient's death, any remaining balance in the account goes to the state.

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