Miller Trusts For Medicaid Planning in Texas
Make meeting Medicaid income limits easier with Miller Trusts
Do you suffer from the “Goldilocks effect” when it comes to planning for future medical care? If your income and assets are too high or too low to make you eligible, qualifying for Medicaid can be a challenge.
Many elderly people who require long-term care depend on support from Medicaid. But the Medicaid program has strict income and asset limits, and simply spending or giving away your assets to qualify isn’t allowed. At the same time, most people either can’t or don’t want to burden their families with the high cost of long-term care.
That’s where Miller Trusts come in.
If you have too much wealth to qualify for Medicaid—but not enough to afford the care you need, contact the experienced elder law attorneys at Shann M. Chaudhry, Attorney at Law, PLLC, today to learn more about your options, including Miller Trusts.
What is a Miller Trust?
A Miller Trust, also known as a Qualified Income Trust (QIT), may help you meet Medicaid’s income requirements, making your medical care more affordable.
A Miller Trust is a special type of trust account that allows you to “divert” your income so that it won’t be counted toward the Medicaid income limit. For many people, placing income in a Miller Trust can improve their chances of qualifying for Medicaid benefits while preserving their assets and long-term financial goals.
How Does a Miller Trust Work?
Elder law, including the laws surrounding the use of Miller Trusts in Medicaid planning, is nuanced.
It’s best to work with an experienced attorney to ensure that your Miller Trust complies with all of the applicable regulations. Otherwise, the assets within your trust could still be counted toward the Medicaid income limit, which could jeopardize your eligibility for the program.
Your elder law attorney can advise you as to whether a Miller Trust is the right option for you, and whether there are any other options available to help you access the care you need.
Setting up a Miller Trust
1. Identify a trustee
Your trustee will be responsible for managing the funds in your account and ensuring that the trust stays in compliance with both Medicaid regulations and Texas state law. Depending on the circumstances, you might choose a family member, trusted friend, accountant, or attorney to act as the trustee for your Miller account.
1. Identify a trustee
Your trustee will be responsible for managing the funds in your account and ensuring that the trust stays in compliance with both Medicaid regulations and Texas state law. Depending on the circumstances, you might choose a family member, trusted friend, accountant, or attorney to act as the trustee for your Miller account.
2. Draft a trust agreement
A trust agreement outlines the terms and conditions of your trust, including:
- The trustee
- The beneficiary
- How the trust should be managed
- How funds in the trust should be used
3. Fund the trust
You must transfer a certain amount of your income into the trust account each month. Your trustee will then use that money to pay for approved expenses, such as medical bills.
Because the funds in a Miller Trust can only be used for certain types of expenses, work with an accountant or knowledgeable elder law attorney to determine how your Miller Trust should be funded (and how much income should be added to the trust each month).
3. Fund the trust
You must transfer a certain amount of your income into the trust account each month. Your trustee will then use that money to pay for approved expenses, such as medical bills.
Because the funds in a Miller Trust can only be used for certain types of expenses, work with an accountant or knowledgeable elder law attorney to determine how your Miller Trust should be funded (and how much income should be added to the trust each month).
4. Maintain compliance
Like most trust accounts, Miller Trusts are subject to certain rules and regulations. Your trustee will be responsible for performing the necessary tasks to keep your trust compliant. For example, your trustee will need to keep detailed records of all deposits and withdrawals from the account.
Request a consultation with a knowledgeable elder law attorney today to learn how Miller Trusts might apply to your Medicaid qualification plans.
Requirements of a Miller Trust
Like any trust, a Miller Trust needs to meet certain requirements to be considered valid in the state of Texas. For starters, the trust must be an irrevocable trust. It must also be used solely for the benefit of the person on Medicaid.
There are also requirements for the way income diverted to a Miller Trust should be spent. Your trustee must only use the funds in the account for approved expenses, such as medical bills.
Limitations of Miller Trusts
A Miller Trust could help you qualify for Medicaid, but only if it is used correctly. A Miller Trust should only be used to divert income—not assets such as real estate or vehicles. The funds held in a Miller Trust must only be used for certain expenses, such as healthcare premiums or medical bills.
Navigating Medicaid’s rules and regulations for Miller Trusts can be challenging without the assistance of an experienced elder law attorney. To position yourself for the best chance of meeting Medicaid eligibility guidelines, rely on a reputable elder law attorney to help you explore your options.
Advantages of Miller Trusts
The most obvious advantage of a Miller Trust is that it can help you qualify for Medicaid benefits, which may drastically reduce the financial burden of accessing long-term care.
A Miller Trust may also help protect your income from Medicaid spend-down requirements, preserving your money for other obligations. Many older adults find that creating a Miller Trust offers them peace of mind that their long-term healthcare needs will be taken care of.
Finally, income diverted to a Miller Trust may not be counted toward taxable income, which could lead to tax savings for some individuals.
Wondering Whether a Miller Trust is Right for You? We Can Help!
If you’re considering adding a Miller Trust to your Medicaid planning strategy, please contact us for an affordable consultation. At the law firm of Shann M. Chaudhry Esq., Attorney at Law PLLC, we believe that everyone deserves the opportunity to make an informed decision about their healthcare and finances.
Our compassionate team is well-versed in the many nuances of elder law, and we’re dedicated to making sure you understand all of the Medicare planning options available to you. If setting up a Miller Trust is the right choice for you, we’ll guide you through the process step by step and ensure that your trust complies with all of the relevant rules and regulations.