Medicaid can help pay for nursing home care, but only when income and assets meet strict limits. In Texas, even if you have no assets, you may face the problem of having too much income to qualify but too little to pay the bill. Opening a Miller Trust solves the problem.
A Miller Trust is also known as a “Qualified Income Trust.” You need one when the monthly income of the person needing care exceeds $2,523 (the amount changes yearly). Income must flow into and out of the trust according to complex rules established by the state. Though opening an account seems simple, mistakes are common.
Opening the Miller Trust must be done carefully. Mishandled and trust could be disqualified costing substantial benefits that can’t be replaced. Here are seven of the biggest mistakes to avoid:
- Putting in the “wrong” money
The only thing that can be deposited into a Miller Trust is income of the person needing care. Don’t make the mistake of trying to use the trust to shelter assets. Putting assets in the trust prevents Medicaid eligibility.
- Rounding off the amount deposited into the Miller Trust
If you only deposit a portion of a Social Security check or retirement check into the Miller Trust account, Medicaid will disqualify the trust. You must deposit the exact amount of the checks received.
- Not putting in the money on time
You must deposit income to the Miller Trust bank account by the last business day of the month it is received. Here’s why. Medicaid rules automatically reclassify income received in a given month as assets the month following. After the last minute of the last day of the month, the money is no longer considered income. It’s an asset. Depositing assets “breaks” the trust and disqualifies the care recipient from eligibility.
- Listening to bank personnel
Most bank employees are not familiar with Millers Trusts. They don’t understand Medicaid’s complex rules. Bank employees are used to setting up asset trusts. A Miller Trust is different. The banker may tell you that you need a separate tax I.D. number. While that may be true when setting up accounts for an asset trust, it doesn’t apply to Miller Trusts. Federal income tax rules only require the use of the Social Security Number of of the person needing care. Doing otherwise makes you’re life more difficult and violates tax law!
- Attaching a debit card or credit card to the trust, or authorizing more than one person to sign checks
The rules for this type of trust are very specific. Though your bank may offer the ability to attach a debit card or credit card to the account, don’t do it. Also remember that the person who is named as trustee is the only one who can sign checks. Do not give anyone else signing authority.
- Not keeping careful records
A Miller Trust must be carefully administered. Keep an itemized list of all money spent on the patient. The Medicaid caseworker will ask to review the Miller Trust records. Be sure to keep all of the monthly statements. It goes without saying you need to balance the account every month.
- Not using an elder law attorney to help set up the account
These are just a few of the many mistakes that can be made when setting up a Miller Trust. To make sure it is done right and your loved one qualifies for Medicaid, get help from a Texas elder law attorney.
Texas is only one of 23 Medicaid Income Cap States. Your state may have additional rules regarding how to set a Miller Trust for Medicaid. Be sure to contact an elder law attorney in your state.