Florida Medicaid requires that a Miller Trust be funded before Medicaid application and approval. No one seems to know how much to fund. If we fund too much, we may never get it back because of limitations of the trust, but if too little, Medicaid may disqualify. Suggestions? Thanks. Please respond to this post if you would be so kind. I am an owner of Mr. Heiser's Medicaid Manual, and actually need the 2016 version if it's available. It doesn't see to deal with my question. Thanks again. Paul N.
An Irrevocable Qualified Income Trust (QIT) aka “Miller Trust” is codified in Federal law to provide a mechanism for those with high income and low assets to qualify for Medicaid long-term care benefits when countable income exceeds a given state’s Medicaid eligibility “income cap”. In Florida, the income cap for 2016 is $2,199 per month.
Note that countable income is GROSS income from all sources. This includes payments received for benefits such as pension, disability and worker’s compensation, most VA cash benefits, and retirement plan distributions such as those from IRA’s and 401(k)’s. It also includes net income from rental income property and any variable income the applicant/beneficiary may receive. The trust is an income only trust and NOT designed to receive assets and no assets should ever be placed in a QIT.
The trust must be funded each month with the amount of income that exceeds the income cap. There is no prohibition against over-funding the trust and it is, therefore, always best to over-fund the trust (even minimally) in case of errors. As long as the trust is funded only with income (not assets) the only consequence to over funding is that at the beneficiaries demise any funds remaining in the trust must go to costs of care or for other permitted distributions. Any excess funds remaining after such payments and distributions must be paid to the State. In this event, since distributions from the trust are made monthly, there should be only a small residual balance (if any) in the trust account at the end of any given month that may be subject to Medicaid “pay-back”.
If the beneficiary is in a nursing home, many trustees will fund the trust with all of the beneficiaries income since, for a nursing home patient, all income will be deemed “Patient Responsibility” and be paid to the nursing home except for the Personal Needs Allowance (currently $105), uncovered medical expenses such as Medicare supplement premiums or transportation charges, and that portion of the beneficiaries income that is to be transferred to the Community Spouse as an income allowance - all permitted distributions from a properly drafted QIT.
Income may be variable or may increase or decrease over time for any number of reasons. It is important, therefore, that the trust be properly funded for each month the beneficiary is receiving Medicaid benefits and that changes in income be reported to the state on an ongoing basis.
Miller is not a DIY project IMHO. Miller is terrific for what it does but it has to meet the pretty exacting criteria for type of income ( it has to be guaranteed income source) and then set up to do the miller for however your state requires a miller to be structured (like excess $ goes into a state kitty or goes to the facility so no build up of excess funds over time). You need an elder law to set this up. There was someone on this site who did one in FL for their mom, it ran about 1200 to set up and had no building of excess. Really it's not a DIY and its not a universal format for a miller to be correctly done.
Miller is like other trusts that have a stream of income to support the costs of the trust. Like you set a trust for interest, dividends, a regular draw from a checking account etc to go into the trust on a set schedule to have to pay for whatever the trust needs to pay for. Like say a trust owns a house, the funds in the trusts bank account get used to pay for utilities, taxes, etc.
Miller is similar in that every month miller gets the excess income that is taking you over the income ceiling set by your state. So if you get $ 3,500 a mo, but state has $ 2,100 max, then the miller gets the excess $ 1,400.
Now miller has specific requirements as to what income is acceptable in that it must be guaranteed income. Not all income is guaranteed....SS is, but some retirement income are not. Not all income sources can be made Medicaid complaint to be acceptable for medicaid. Like for annuities - as I think they have to have the state as the beneficiary - that can be a problem if you can't change the income product (annuities are insurance products) beneficiary then it can't be included in the miller. Rental income I don't think can qualify for a miller as renters come & go.
Also the miller has to be done so that it s flexible. Like if next year SS pays $167.23 more a month, the miller is set up to adjust for changes.
It's not simple. You need an atty.