Miller Trust Fund
by Megan
What Is It?
- Irrevocable trust established in order to recieve medicaid benefits when the applicant makes more than the state mandated income limit.
- Trust is then used to pay for the persons care
- Also known as (depending on the state)
- Qualified income trust (QIT)
- D4B Trust
- Miller Trust
- Only used in Income Capped States
About
Why is it needed?
- Applicant exceeds income limit for medicaid
- Applicant needs long-term care
- Applicant has a spouse that still needs spousal support
Miller v. Ibarra, 746 F. Supp. 19 (D. Colo. 1990)
- 4 women who were living in nursing homes and were total care were denied medicaid due to their incomes exceeding the limit.
- Lottie Bernice Ham
- Marie Louise Turtness
- Mary D Cummings
- Maria S Tusei
- All 4 women made trusts that were authorized by their district county states and were still denied benefits by the state of CO.
- The case was filed to determine:
- Were the denials actionable
- Should their trust incomes be considered "available"
- Do the creation of the trusts constitute disposing of resources
- Were the trusts "medicaid qualifying trusts"
History of Miller Trust
Obra '93
Obra '93
- Codified Miller vs Ibarra with 2 rules:
- 1. The trust must consist solely of pension, Social Security, and other income, plus the accumulated income on those trust amounts; and
- 2. The trust must provide that any sums remaining at the death of the beneficiary will first be used to repay the state for Medicaid expenditures.
- [42 U.S.C. § 1396p(d)(4)(B)]
Eligibility
- Must meet basic eligibility for the specific states medicaid program
- Exceed minimum income limit
- Have a trustee for trust fund
How to set up trust
- Meet with elder law attorney or medicaid planning attorney
- attorney will draft trust for applicant
- Must be signed by applicant
- MDPOA, guardian, or proxy if applicant cannot sign
- Take document to the bank and ask them to open trust
- Trust will need a trustee assigned who manages account
- cannot be the applicant
How to set up trust fund
How to use trust
- Open checking account for trust and keep another checking account open
- If married with joint accounts, take applicant name off every other account but the trust account
- Make monthly deposits from checking account to the trust account
- deposit all income except what is needed for spouse, if not single
- Medicaid approves what trustee can pay for from the trust
- Can cover approved medicaid expenses such as medicare premiums and other needs
- Remaining goes to nursing home
How to use the trust
Drawbacks to trust
- Has to be provision in document stating that after applicant passes:
- money remaining in account will go towards paying medicaid back for any portion they covered for applicant care
Below Income Gap
Diagrams
Above Income Gap
- by Braverman Law Group. (2021, July 16). Using a Qualified Income Trust in Colorado to Reduce Income and Retain Medicaid Eligibility for Long-Term Elder Care — Boulder Estate Planning Legal Blog — July 16, 2021. Boulder Estate Planning Legal Blog. https://www.braverman-law.com/blog/using-a-qualified-income-trust-in-colorado-to-reduce-income-and-retain-medicaid-eligibility-for-long-term-elder-care/#:~:text=After%20a%20Miller%20trust%20is%20established%20in%20Colorado%2C,share%20of%20their%20care%20and%20certain%20specific%20allowances
- David McGuffey. (2012, June 22). Miller Trusts - What They Are and How They Work [Video]. YouTube. https://www.youtube.com/watch?v=oduf830_9Js
- Elder Needs Law, PLLC. (2016, November 22). What is a Miller Trust? [Video]. YouTube. https://www.youtube.com/watch?v=XTl2OkCUasc
- Erieau, B. (2019, February 19). What is a Miller Trust. Krause Financial Services. https://www.medicaidannuity.com/miller-trust/
- Miller v. Ibarra, 746 F. Supp. 19 (D. Colo. 1990). (n.d.). Justia Law. https://law.justia.com/cases/federal/district-courts/FSupp/746/19/1756624/
- Vouga Elder Law. (2018, March 9). THE BIG MEDICAID SECRET NURSING HOMES WON’T TELL YOU [Video]. YouTube. https://www.youtube.com/watch?v=O0VOq4Zqg9Q
- Vouga Elder Law. (2019, January 31). Don’t Go Broke in a Nursing Home [Video]. YouTube. https://www.youtube.com/watch?v=A3QhrVUO9j8
Resources