Understanding a Miller trust

On Behalf of | Sep 21, 2021 | Long Term Care Planning |

Many individuals in Texas qualify for Medicaid, which is a government program that provides health care coverage for low-income recipients. When the state determines a person’s eligibility, it will consider all income sources including employment income, benefits, child support, alimony and other sources.

Generally, an applicant will need to provide proof of income, residency, age and citizenship for every member of the person’s household.

Miller trust

A Miller trust offers a Medicaid applicant the ability to set up an irrevocable trust which holds their income. The funds in this trust can be used to pay the Medicaid applicant a monthly personal needs allowance. It can also pay for his or her spouse’s monthly personal needs allowance. Then, any funds that are left over are used to pay care-related bills.

The Medicaid applicant cannot put parts of certain income into the trust account, like pensions or a Social Security check, for example. Assets and income that do not count toward eligibility limits are also not added to this account. This includes a spouse’s income, some benefit payments, income tax payments and some annuity payments.

The Medicaid applicant also cannot be a trustee of the account. The trustee is usually a family member and each month they use the money for the Medicaid applicant’s share of their costs, personal needs allowance, and any other medical costs not covered by Medicaid.

If there is any money left in the trust when the person dies, Medicaid has a right to the money in order to recover the cost of care. It’s important that the Miller trust is completed correctly. There is assistance available to help with this complex process.