15 Apr
Organizing long-term care, such as nursing home services, can be a daunting experience for many people. Alongside determining what you or your loved one needs, you also have to figure out how to pay for it.
Medicaid is designed to help Texans with limited incomes, but many individuals find themselves in a frustrating position. They earn too much to qualify for Medicaid, but not enough to pay for care out of pocket. That’s where a Miller Trust comes in. Keep reading to learn more about a Miller Trust to see whether it’s right for you:
What is a Miller Trust?
A Miller Trust, also called a Qualified Income Trust (QIT), is an irrevocable trust used in income cap states like Texas to help individuals qualify for Medicaid long-term care when their income exceeds the limit.
In Texas, that income limit depends on the service you’re accessing and whether you’re an individual or a couple. You can access that information from the Texas Health and Human Services or your local trusted Medicaid planning lawyer in Texas.
In simple terms, a Miller Trust allows you to legally redirect some of your income into a separate account that doesn’t count toward your income when determining eligibility. They are specifically permitted in Texas for Medicaid applicants who wouldn’t otherwise qualify for Medicaid long-term care assistance due to their earnings.
Why Are Miller Trusts So Important?
Long-term care can cost a significant sum of money, which many older adults who receive only Social Security or a pension can’t afford. However, if their income exceeds Medicaid’s eligibility criteria, they are forced to pay for it out of pocket while still covering their everyday costs. Significant sacrifices can then be made at a great cost to their health and well-being.
Miller Trusts are crucial for many Texans as they help individuals meet the income requirement without giving up their care needs.
How a Miller Trust Works
Accessing the care you or your loved one needs shouldn’t be complicated. With the help of a trusted Medicaid planning attorney, setting up and utilizing a Qualified Income Trust for Medicaid is straightforward:
1. Create a trust document, which establishes the Miller Trust.
2. Open a dedicated bank account, which will be used exclusively for your Miller Trust.
3. Deposit some or all of your monthly income, such as pension payments or Social Security, into the Trust.
4. Appoint a trustee, someone other than the Medicaid applicant, who will manage the account and make the payments.
5. Use the funds in your Miller Trust for approved purchases, such as nursing home costs, medical expenses, insurance premiums, and a small personal allowance.
The income placed into the Miller Trust isn’t counted by Medicaid, which means the applicant may now qualify for Medicaid when they previously didn’t.
Who is a Miller Trust Suitable for?
If you’ve never discussed the prospect of any kind of trust with a legal professional, you may not be sure whether a Miller Trust is a suitable option for you. You can learn about whether you would benefit from a Miller Trust by talking to a Medicaid planning lawyer. However, most people who are over-income but under-resourced, with the following criteria, deem a Trust to be appropriate:
- Living in Texas
- Requiring long-term care, such as nursing home services
- Earning income slightly above Medicaid limits
- Being unable to afford care privately
The Advantages of Setting Up a Miller Trust
Even if you’re unsure whether a Miller Trust is right for you, don’t hesitate to contact an elder law legal professional to discuss its potential for your unique situation. There are many benefits associated with setting up a Miller Trust, including:
- Qualifying for Medicaid when even a small excess in income could cause you to otherwise be ineligible.
- Medicaid covers long-term care costs, which may otherwise be unaffordable.
- A compliant, widely accepted, and legal option for Medicaid planning in Texas.
- Straightforward with the help of a trusted Medicaid planning lawyer.
The Limitations of a Miller Trust
There’s no denying that a Qualified Income Trust benefits many people and ensures straightforward access to the care they need. However, it’s important to be aware of its limitations:
- It has an irrevocable structure, which means that once you create the Trust, you can’t change or cancel it.
- It addresses income, not assets. If you have too many assets, setting up a Miller Trust won’t make you eligible.
- You must make deposits of the required income every month, as missing deposits can jeopardize your Medicaid eligibility.
- Remaining funds in a Miller Trust must be used to reimburse the state for Medicaid benefits after the beneficiary’s death.
Set Up a Miller Trust with Help from Livens & Reed in Texas
Whether you’re confident that setting up a Miller Trust is right for you or you need more details to make an informed choice, contact our elder law and Medicaid planning lawyers at Livens & Reed today.
Our experienced team will learn more about your situation, discuss the most appropriate options, and help you plan for comfort and care in your retirement years. Reach out to start your legal service today.