What Is a Miller Trust?

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  • If your income is too high to qualify for Medicaid long-term care benefits, you may be able to set up a Miller Trust to divert some of that money so you can get the care you need.

You need Medicaid long-term care benefits, but your income exceeds your state’s published income cap, which means you’re not eligible. Is there anything you can do? Yes. You may be able to set up a Miller Trust, also called a Qualified Income Trust. Creating a Miller Trust can help you receive the benefits you need without having to compromise your income.

What Is a Miller Trust (Qualified Income Trust)?

A Miller Trust is a type of trust that holds excess income so you can qualify for Medicaid long-term care benefits. Your state may have an alternative name for this type of trust. For example, in Arizona, it’s called an Income-Only Trust. In Oregon, it’s called an Income Cap Trust. In New Mexico, it’s called an Income Diversion Trust.

How Do Miller Trusts Work?

A Miller Trust is similar to other types of trusts in that a trustee (i.e., someone other than you) manages the money. For example, your trustee could be your adult child, a friend, or other family member. It should be someone who you’re confident will make financial decisions in your best interest.

The state in which you receive Medicaid long-term care benefits must be named the beneficiary. A Miller Trust is an irrevocable trust, which means it cannot be altered or canceled.

Here’s how it works: Each month, all or a portion of your income will be deposited into the trust, depending on your state’s requirements. Your trustee will disperse money thereafter in compliance with state law and the guidelines set forth by the trust.

Can My Trustee Pay Bills With a Miller Trust?

You can pay medical bills that aren’t covered by Medicaid and Medicare as well as other state-approved premiums and medical costs. However, you can’t generally use money from the Miller Trust to pay bills such as your mortgage, rent, taxes, life insurance premiums, utilities, and other non-medical expenses.

Can My Trustee Withdraw Money From the Miller Trust For Any Other Reasons?

Yes. The trustee who manages your trust account can withdraw money to pay you a personal needs allowance (PNA). A PNA can help you pay for clothing, personal toiletries, over-the-counter medication, medical copayments and deductibles, insurance premiums, entertainment, and more, depending on state law. This specific PNA amount also varies by state and by the setting in which you receive Medicaid long-term care benefits.

If you’re married and your non-applicant spouse has little to no income, your trustee can also withdraw money from the Miller Trust to pay a monthly maintenance needs allowance to your spouse. Again, the amount varies by state and by circumstances.

Can I Contribute as Much as I Want to the Qualified Income Trust?

It depends on your state. Some states restrict the amount. Others impose what’s called a practical limit, meaning no more than the cost of private pay for nursing home care in your state. If you’re married, the practical limit is no more than a spousal allowance plus the cost of private pay nursing home care.

Do I Need a Miller Trust?

It depends on where you live and your unique financial circumstances. If your income falls below your state’s published income cap, you’ll automatically qualify for Medicaid long-term benefits. If it doesn’t, you’ll need to know whether you live in a ‘medically needy’ (sometimes called ‘spend down’) state or a ‘categorically needy’ (sometimes called ‘income cap’) state. The former allows you to spend excess income on medical care and expenses until you become eligible for Medicaid long-term care benefits. The latter doesn’t permit this. Instead, you can create a Miller Trust.

How Can I Set Up a Medicaid Miller Trust Account?

Your best bet is to consult with an estate planning or elder law attorney in your area. They can tell you whether you live in an income cap state and help you create a customized Medicaid Miller Trust account.

If you have questions about your Medicaid benefits, you can reach out to a representative from the Medicaid program in your state.

About the Author

Lisa Eramo is an independent health care writer whose work appears in the Journal of the American Health Information Management Association, Healthcare Financial Management Association, For The Record Magazine, Medical Economics, Medscape and more.

Lisa studied creative writing at Hamilton College and obtained a master’s degree in journalism from Northeastern University. She is a member of the American Health Information Management Association, American Academy of Professional Coders, Society of Professional Journalists, Association of Health Care Journalists and the American Society of Journalists and Authors.

Lisa currently resides in Cranston, Rhode Island with her wife and two-year-old twin boys.

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