What is a Miller Trust?
A Miller Trust, which is also known as a Qualified Income Trust, is not for your assets not for your income. A Miller Trust is a tool we use when a Medicaid applicant’s income exceeds the income cap set by Medicaid to help that applicant qualify. The income cap is just one of the several requirements of eligibility for Medicaid. The income cap number changes, generally each year, and like all eligibility requirements can be different from state to state.
If a Medicaid applicant’s income exceeds the income cap, then a Miller Trust needs to be established. Generally, the applicant or their power of attorney signs the trust, as well as the trustee. Then the trustee of the trust establishes a bank account in the trust name. This bank account is where the applicant’s income must go each month.
You might be wondering why does Medicaid allow Miller Trusts? The reason Medicaid allows Miller Trusts is because in order to be a Miller Trust the trust must provide a payback provision to the State of Texas. This payback provision means that when the applicant passes away the funds in the Miller Trust must be paid to the State of Texas. However, when administered properly the trust should not have excess funds.
Remember, Miller Trusts are just for people currently applying for Medicaid. One of the most common Medicaid myths I hear is that someone can move all of their assets into a Miller Trust and be Medicaid eligible. Not only is that incorrect but it could also expose someone’s assets to a payback provision that is not required.
The eligibility requirements change frequently for Medicaid and vary from state to state. This blog is not legal advice. The purpose of the blog is informational only. You should consult with your attorney about whether a Miller Trust is appropriate or not.