Qualified Income Trusts: Miller Trusts and Medicaid

Indiana as well as other states limit Medicaid eligibility to only those individuals whose monthly income is below a special income level. The cap changes by law periodically and is currently approximately $2,200. However, for individuals with monthly income exceeding the cap, qualification is possible if the applicant has a Miller Trust.

The first step to establishing a Miller Trust is to create the trust instrument. Boeglin, Gerardot and Grubbs has the experience necessary to assist you in drafting the trust document. Once prepared and signed properly, a bank account should be opened in the name of the trustee of the Miller Trust under the Social Security number of the beneficiary. The beneficiary is the person who needs Medicaid. Only the beneficiary’s income may be deposited into the Miller Trust bank account. No other income or assets should go into the account, not even the income of the Medicaid applicant’s spouse.

The Miller Trust (QIT) bank account should be opened no later than the month the beneficiary intends to qualify for Medicaid. This is necessary because the applicant’s income may not exceed the cap to qualify for either long-term care financial assistance or a Medicaid wavier for financial assistance at home. Deposits equal to at least an amount exceeding the special income level (SIL) should be put in the trust. The safest course would be to deposit all of the beneficiary’s monthly income into the trust, although this is not required.

Some banks will be familiar with Miller Trust accounts and other banks may not be aware. If the bank officer requests a new EIN (Employer Identification Number), you should seek the advice of an estate planning attorney. The only proper tax identification number for a Miller Trust account is the beneficiary’s Social Security Number.

No minimum deposit and no minimum fee accounts are the most desired type of checking account for QIT accounts. Only the trustee should be authorized to write checks or withdraw from the account, not the beneficiary. Ask the bank to send all bank statements to the trustee with images of checks drawn on the account. Most of the funds will be spent on the beneficiary’s health insurance premiums, and for nursing home care. Avoid using debit cards for the QIT account. It will be best to keep a clear paper trail using regular checks.

Boeglin, Gerardot and Grubbs is available to assist with Miller Trust planning and advice. Please contact us at 260-436-3883.