For most seniors, Medicaid is necessary for long-term care. It’s also notoriously tricky to navigate.
Whether it’s correctly completing mountains of paperwork or making too much money to qualify, seniors and their loved ones often worry about applying for Medicaid eligibility. How do you protect your or your loved one’s assets while still getting the necessary Medicaid care?
If these worries sound familiar, a Miller Trust might be just what you need.
Here, the team at Legacy Navigation outlines the details of Miller Trust accounts, including pros, cons, and common questions, and lets you know how they can take the headache and hassle out of Medicaid eligibility.
What Is a Miller Trust?
Are you worried that you make too much money to qualify for Medicaid? Depending on where you live, your state may allow Medicaid recipients to funnel extra income into a Miller Trust, a legal arrangement designed to help individuals qualify for Medicaid even if their income exceeds eligibility limits.
Miller Trusts are also sometimes called Qualified Income Trusts (QIT) and are popular in states with income caps for Medicaid long-term care benefits. Depending on what state you live in, a Miller Trust may also be called:
- Income Cap Trust
- d4B Trust
- Income Diversion Trust
- Irrevocable Income Trust
- Income Trust
- Income-Only Trust
If all this information sounds overwhelming, we’re here to help! The professionals at Legacy Navigation have over 15 years of experience in helping seniors successfully set up Miller Trust accounts. Reach out today to learn more.
How Does a Miller Trust Work?
Miller Trust accounts are set up like any other checking account and are a great way to get Medicaid for long-term care if the patient exceeds income limits.
First, the beneficiary and the trustee fill out paperwork, including a trust document, and then a trust bank account is opened. Any income the patient makes that exceeds Medicaid limits will be placed in the Miller Trust account each month.
At the end of the month, the designated account trustee makes distributions from the trust to pay specific bills and expenses. Miller Trusts can only be used to pay certain medical expenses and sometimes have timing restrictions on when and how much money can be deposited into the account. Be sure to check your local state regulations on Miller accounts before starting one.
If these steps make your head spin, there is hope. Legacy Navigation is here to help take the stress out of applying for a Miller Trust. Our team of Certified Medicaid Planners™ can help you not only set up a Miller Trust but also work with Medicaid providers to get the care you or your loved one needs.
An Example of How a Miller Trust Might Be Used
How exactly does a Miller Trust help someone get Medicaid? It allows people who make more than the Medicaid income cap to still get Medicaid benefits, such as long-term nursing home care.
For example, Mr. Garcia makes $3,000 a month, which exceeds his state’s Medicaid income maximum of $2,500. However, Mr. Garcia’s assisted living facility costs $12,000 a month.
In this case, Mr. Garcia and his family could set up a Miller Trust and deposit $500 a month, the amount of income over the Medicaid income maximum. Mr. Garcia would then qualify for the assistance he needs, and the Miller Trust fund would be used to pay for certain aspects of his care and personal expenses.
How Do You Set Up a Miller Trust Account?
- Confirm eligibility for a Miller Trust account.
- Draft the Miller Trust document, an irrevocable contract that states the Miller Trust will only be used for certain expenses and lists Medicaid as the primary beneficiary.
- Open a trust bank account with a trustee, usually a close family member who helps manage the account. The beneficiary is the person who receives the Medicaid care, and by law cannot be the same person as the trustee.
- Deposit only income that exceeds the Medicaid pay cap, including Social Security and pensions, into the Miller Trust. Do not deposit any other cash.
- Use Miller Trust funds for approved expenses as outlined by your state laws. Legacy Navigation can help you determine what expenses can be used from your Miller Trust.
Are you ready to set up a Miller Trust account? You can complete these steps yourself, or the professionals at Legacy Navigation can draft the documentation for you and help you with the setup process from start to finish. Give us a call to set up your initial consultation.
Commonly Asked Questions About Miller Trusts
What Are the Pros of a Miller Trust?
The pros of Miller Trusts include:
- Medicaid qualification: The key advantage of the trust is that it allows individuals who are “over income” to qualify for nursing home or home-based care assistance.
- Crisis planning: Miller Trusts can be set up quickly in the midst of crisis situations, like an unexpected nursing home admission.
- Income management: Miller Trusts are a structured way to manage your monthly income by enabling the trustee to pay for allowable expenses like personal needs allowances, Medicaid-approved costs, and Medicare premiums.
- Avoids asset spend-down: Rather than an individual spending all their excess income, the trust holds it, which can help prevent having to immediately deplete savings to cover the cost of care.
- Spousal protection: Miller Trusts provide aid in situations of spousal impoverishment by allowing the spouse remaining at home to retain more assets and income.
What Are the Cons of a Miller Trust?
Cons of Miller Trusts include:
- Irrevocable status: Once established, a Miller Trust can’t be updated or terminated.
- Limited access to funds: The trustee may only use funds for specific, allowable expenses, like a personal needs allowance and spousal maintenance
- Estate recovery: Upon the beneficiary’s death, any money remaining in the trust must be used to reimburse the state for Medicaid expenses, leaving little to nothing to heirs.
- Strict income limits: A Miller Trust may only be used for income, not for asset protection, and all income must flow through the trust.
- Administrative burden: Miller Trusts require a trustee, a dedicated bank account, and strict, timely monthly deposits. Account mismanagement may result in a loss of Medicaid eligibility.
- Not available in every state: Miller Trusts are only valid in “income-cap” states.
Which States Allow Miller Trusts?
The following states currently allow Miller Trusts:
- Alabama (nursing home only)
- Alaska
- Arizona
- Arkansas
- Colorado
- Delaware
- Florida
- Georgia
- Idaho
- Indiana
- Iowa
- Kentucky
- Mississippi
- Missouri
- Nevada
- New Jersey
- New Mexico
- Ohio
- Oklahoma
- Oregon
- South Carolina
- South Dakota
- Tennessee
- Texas
- Wyoming (nursing home only)
What Can Be Paid Out of a Miller Trust?
The account trustee may only use a Miller Trust to pay out certain expenses, which fall into the following categories:
- Minimum monthly maintenance needs allowance: This is paid to the Medicaid beneficiary’s spouse to cover basic living expenses like food, housing, and transportation.
- Monthly personal needs allowance: This allowance covers the beneficiary’s expenses such as clothing, personal care items, transportation, entertainment, etc. This number can vary depending on whether the beneficiary lives in a nursing home or receives home care.
- Medical assistance cost: After these two payments have been made, any additional funds may go toward the cost of medical assistance provided to the beneficiary. This includes medical treatments, medications, doctor visits, hospital stays, or other related healthcare expenses not paid for by Medicaid.
Is There a Maximum Amount You Can Deposit Into Your Trust?
It depends on where you live. Some states have restrictions on the maximum amount a beneficiary can deposit into a Miller Trust. This varies from state to state, and even within the state itself.
For example, Arizona allows beneficiaries to deposit up to $8,200 a month into Miller Trusts in Maricopa, Pima, and Pinal counties, but only $7,750 a month in all other counties.
Other limits, such as practical restrictions on how much can be deposited into a Miller Trust, also exist. For single individuals, a practical limit is generally the cost of nursing home care in their state of residence. For married couples, it typically includes the Spousal Income Allowance, if applicable, along with the cost of nursing home care.
Can I Get Help Setting Up a Miller Trust?
Yes. In fact, we highly recommend it! Miller Trusts require a considerable amount of prep. The legal documentation required varies from state to state, which often means multiple trips to the bank or consulting with lawyers. For seniors and their busy loved ones, this can present a significant barrier to the benefits of a Miller Trust.
Let the Certified Medicaid Planners™ at Legacy Navigation help you work with the Medicaid system. As part of our flat fee for services, Legacy Navigation will find the documentation you need to set up a Miller Trust and a bank that accepts them.
If you are local, Legacy Navigation will even accompany you to the bank to help set it up. If you aren’t near a Legacy Navigation office, we’ll call the bank to schedule your appointment, ensure they have all the information they need, and draft the documents ahead of time. With Legacy Navigation, you get all the benefits of expertise, exactly when you need them.
Legacy Navigation: Certified Medicaid Planners™ With Over 15 Years of Experience in Setting Up Miller Trust Accounts
Legacy Navigation is a team of Medicaid specialists certified in Medicaid planning, specifically focusing on individuals 65 and older and disabled populations.
Whether you’re in the Medicaid application process or want to set up a Miller Trust, we take care of the details on your behalf in a fraction of the time, removing the burden of long-term care planning from you and your loved ones.
Reach out to our experienced team today for a free consultation.
The content in this blog is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition.
