A Miller trust, or qualified income trust (QIT), is a legal arrangement that allows individuals who don’t meet Medicaid’s income limits to qualify for coverage of long-term care under Medicaid.
With a Miller trust, you deposit a portion of your income in a dedicated account, where it’s not counted toward your financial eligibility for Medicaid. Those funds are then used to pay for care.
Medicare is a federal health insurance program for adults ages 65 years and over. While Medicare provides comprehensive coverage for inpatient and outpatient medical care, it does not cover long-term care, such as in a nursing home.
And the cost of long-term care can be a significant financial burden for older adults.
Individuals with low incomes may receive assistance with these costs if they qualify for Medicaid, which is a joint state and federal health insurance program.
However, it’s possible that your income may be too high for Medicaid eligibility but too low to comfortably cover the cost of long-term care.
A Miller trust provides a way for individuals in this situation to qualify for Medicaid.
In this article, we discuss what Miller trusts are, how to form them, and what limitations they have.
Some states have strict income caps for Medicaid eligibility. In these states, if your income exceeds the cap, you’re ineligible for coverage.
Miller trusts are a legal way for these individuals to qualify for Medicaid coverage of long-term care, provided they meet all other Medicaid eligibility criteria.
With a Miller trust, you deposit some or all of your monthly income in a dedicated bank account, where it is not counted toward your financial eligibility for Medicaid. Possible income sources include Social Security payments, pensions, and annuities.
A predetermined trustee, which is often a family member, can use the funds in the trust for various expenses, such as:
- nursing home care
- medical costs
- premiums
- personal allowance
Deposits must be made in a timely fashion, and the trustee needs to maintain documentation of deposits and payments in the event of a review.
Miller trusts have a range of rules and features that some may view as limitations or drawbacks.
For one, these trusts can only be used for income deposits; they cannot hold assets. If you’re ineligible for Medicaid due to your assets, a Miller trust will not help you qualify.
After establishing a Miller trust, you’ll need to deposit a set amount each month into the trust. If you miss your deposits or end up depositing too little into the trust, you may lose Medicaid eligibility.
Miller trusts are “irrevocable,” meaning that once you establish one, it is permanent, and you cannot make any changes to it.
Finally, these trusts are subject to Medicaid recovery. After the Medicaid recipient dies, Medicaid can recover funds from the Miller trust to pay for the care they received while they were alive.
Before forming a Miller trust, you may wish to speak with an elder law attorney who is familiar with your state’s Medicaid regulations.
An attorney can help you navigate forming a trust while ensuring you’re compliant in all other areas of Medicaid eligibility, such as resource limits.
States may have slightly different processes for creating a Miller trust, but the general process may involve the following steps:
- completing a trust document with the state
- opening a dedicated bank account
- depositing income to the account
- submitting an application to the state Medicaid office
You’ll also need to name a trustee, who will manage deposits and payments from the account. This can be anyone but the applicant themselves.
When establishing a Miller trust, you’ll need to certify that after the beneficiary’s death, assets in the trust are payable to the state Medicaid agency. This allows Medicaid to recover costs after the Medicaid recipient’s death.
A Miller trust is a legal arrangement that allows a person to qualify for long-term care under Medicaid even if their income exceeds the Medicaid income cap. However, not all states allow individuals to form them.
Miller trusts involve creating a bank account to hold part of a person’s monthly income, which is not counted by Medicaid when determining the applicant’s financial eligibility.