Establishing a Miller Trust in Texas
Medicaid isn’t as ‘free’ as many people think. Under federal law, every state operates a Medicaid Estate Recovery Program to recover assets from program recipients. This means that any money in a bank account exceeding the current Medicaid income limit of $2,982 will be diverted to the state of Texas. If excess funds remain in the account for too long, it’s considered a personal asset and may make the recipient ineligible for Medicaid.
To preserve Medicaid eligibility, discuss a Miller Trust with our team. Also known as a qualifying income trust, it’s a set of instructions applied to a checking account to divert excess income to a trust.
Medicaid Income Limits in Texas
To qualify for a Miller Trust, the recipient must be a Medicaid applicant who requires long-term care and has income exceeding Medicaid limits. The current Texas Medicaid eligibility for seniors is as follows:
- Individual applicant: $2,982/month
- Married (both applying): $5,964/month (combined)
- Married (one applying): $2,982/month (only the applicant’s income is counted, regardless of the spouse’s income)
- Resource limit: A single applicant may have no more than $2,000 in countable assets
Key Rules and Administration Pitfalls
Legal support and advice are recommended to establish a Miller Trust due to the repercussions of non-compliance with financial and legal rules.
The five-year look-back rule: Transferring assets or gifting money within the five years before a Medicaid application can trigger a penalty period.
Miscalculating gross vs. net income: Applying based on net income, rather than gross income. Deductions such as Medicare Part B premiums and taxes are considered income and count toward Medicaid eligibility.
Application timing: Applying too early, too late, or failing to provide comprehensive documentation. Working with a Medicaid lawyer can ensure that application documents are thorough.
Frequently Asked Questions About Miller Trusts
How can money in a Miller Trust be spent?
Excess income placed in a Qualified Income Trust must be spent on approved health, medical, and care-related expenses. It can also be used for mandated living allowances.
What’s the difference between a Miller Trust and a Qualified Income Trust (QIT)?
There are no differences between a Miller Trust and a Qualified Income Trust. The name Miller Trust is a colloquial name derived from a landmark legal case. The formal legal and government name is Qualified Income Trust, or QIT for short.
Will a Miller Trust protect my other assets?
A Miller Trust only addresses your monthly income, such as Social Security, pensions, and annuities. You can’t put assets, such as your savings account or home, into a Miller trust to shield them from Medicaid. There are other estate-planning mechanisms for that.
What happens to the money in a Miller Trust when I die?
As Medicaid paid for your long-term care, the state must be listed as the remainder beneficiary of your Miller Trust. This means that when the recipient of the trust passes away, any remaining funds are used to reimburse the state for the care it provided. Family members are entitled to what remains in the trust after the state has been fully reimbursed.
How Livens & Reed Can Help
We know how daunting it can be to navigate the Medicaid process on your own. Whether you need to know more about your loved one’s eligibility or you’re ready to proceed with establishing a Miller Trust, we’re here to help.
How We Help Set Up Your Miller Trust
We are proud to be an established Medicaid planning firm with in-depth knowledge and experience in Miller Trusts. When you’re ready to establish a Miller Trust, we’ll make the process straightforward and guide you every step of the way.
Alongside establishing the trust, we’ll also work with your bank to ensure the checking account automatically diverts excess funds into it. This automatic option provides peace of mind, knowing your loved one will retain Medicaid eligibility without you needing to manage their checking account for them.
Experienced Medicaid Planning You Can Trust
We strive to make our legal services as convenient as possible. To better serve you, our attorneys and staff provide Medicaid planning, estate preservation, and asset protection in the Dallas-Fort Worth Metroplex and across North Texas. Request a free initial consultation by calling 817-545-3425, emailing our Dallas Miller Trust lawyers, or by filling out our fast and easy online form.
Here at Livens & Reed, PLLC, we pride ourselves on our responsive communication, exceptional client service, and reputation for integrity. We are also highly regarded for our transparent, competitive fee structure and clear and fair billing policies. We look forward to seeing you in one of our two central office locations: Bedford, Fort Worth, and Addison, Dallas.
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