Do trust earnings count for Medicaid?

Do trust earnings count for Medicaid?

Short answer: Income paid, or that could be paid, to the Medicaid applicant from a trust counts as their income. Earnings kept in a properly drafted irrevocable trust do not.

Figures change periodically. Double-check current amounts before relying on them.

Medicaid looks at what the trust can pay to the applicant, not just what it does pay.

  • Revocable trusts. Everything in the trust counts as the person’s asset, and all income counts.
  • Irrevocable trusts. Under federal rules, any portion of the trust from which payment could be made to the person (under any circumstances) counts as an available asset, and payments made to the person count as income. Portions from which no payment could be made are treated as transferred (subject to the look-back).
  • Income-only trusts. Many asset protection trusts let the grantor receive income but not principal. The income counts toward the person’s income limit and patient liability, but the principal is protected.
  • Third-party trusts set up by someone else for the person are treated based on their terms; supplemental needs trusts are designed so distributions do not count.

Before setting up or using a trust, know exactly what it allows.

Getting help

Every situation is different, and small facts can change the answer. If this question affects a real decision, especially with a spouse at home, a home, gifts or a trust, a Certified Medicaid Planner can apply your state’s rules to your situation. As a rough guide, published fees for help with an application range from about $500 to $6,000, and hourly help from about $150 to $600.

Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.

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