7 Mistakes That Will Kill Your Miller Trust.

Miller Trust Mistakes in Harris County, Texas


7 Mistakes That Will Kill Your Miller Trust.

Are you considering setting up a Miller Trust to help pay for nursing home care? Opening a Miller trust is an important step in making sure the person needing care is eligible for Medicaid. But it can be complex and mistakes are common. At the Holland Law Firm, we specialize in creating qualified income trusts that meet all of the state’s rules and regulations.

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.

When is a Miller Trust Necessary?

A Miller Trust is also known as a “Qualified Income Trust.” this is a type of income only trust. The Medicaid applicant needs one when the monthly income of that person exceeds Medicaid’s monthly income limit. The income cap for 2023 is $2,742 (the amount changes yearly). Income must flow into and out of the qualified income trust according to complex rules established by the state.

Miller Trust Account in Harris County, TX

Setting up a Qualified Income Trust looks simple, but costly mistakes are common.

Setting up the Miller Trust must be done carefully. Mishandled and the trust could be disqualified, costing substantial benefits that can’t be replaced.

Here are the frequent mistakes I see that result in lost benefits. Scroll down to learn how to avoid them.

• Not all income is eligible to be placed in the trust

• The trust must be created correctly, with accurate terms and conditions

• You must follow all state rules regarding payments out of the trust

• All income coming into the trust must be reported to the Medicaid office

• The trust must choose a trustee who will manage the money correctly

• A Miller Trust cannot use funds deposited to the income cap trust for anything other than medical bills and related expenses

• The application process can be complex. Mistakes can result in delays or even disqualification from benefits.

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Putting in the “wrong” money.

Putting in the “wrong” money is a mistake that can easily kill a qualified income trust and the applicant’s chance to qualify for Medicaid. To ensure that you are fully compliant and maximize your eligibility for Medicaid, it’s important to understand what CAN and MUST be deposited into an income diversion trust. As such, only the Medicaid recipient’s income can be put into the Miller Trust bank account. Trying to use the trust to shelter assets is a common mistake that can be quite costly, as it will prevent Medicaid eligibility.

Making sure that you have the right funds in a Miller Trust account is essential for it work to work as it’s intended – to get a Medicaid applicant with income that exceeds the income limit qualified for nursing home benefits.

Here are some things to keep in mind when depositing money into your Miller Trust:

  • The money placed into qualified income trusts must be income, not assets. Depositing anything other than cash will disqualify the trust.
  • Make sure all of the deposits come from the patient’s income, not from their spouse or other family members.
  • Do not use the Miller Trust to shelter assets. Trying to do so will blunt the intent to qualify for Medicaid.

Rounding off the amount deposited into the Miller Trust.

If you only deposit a portion of Social Security or pension income into the Miller Trust account, Medicaid will disqualify the trust. You must deposit the exact amount of the checks received. If your mom’s monthly social security check is $2,744.12. deposit that precise amount. Any variation could disqualify the trust and lose you thousands of dollars of benefits.

Not putting in the money on time.

To take advantage of a Miller Trust, the money must be deposited into the trust’s bank account by the last business day of the month it is received. This is because, on the first minute of the first day of the following month, Medicaid rules automatically convert retained income into an asset. If the funds are deposited too late, you shoot yourself in the foot. Remember, depositing assets “breaks” the trust and blocks the care recipient from eligibility.

Listening to bank personnel.

Listening to bank personnel can be a risky move if you’re looking to set up an income only trust to be eligible to reduced your nursing home cost . Most banks don’t understand Medicaid’s complex rules and are used to setting up asset trusts instead.

For example, the banker may tell you that you need to obtain a separate tax I.D. number for the trust. While this may be true when setting up accounts to hold assets, it doesn’t apply to Miller Trusts. According to federal tax rules, only the Social Security Number of the person needing care is required.

Ignoring these rules and opting for the banker’s suggestion can lead to problems down the road. At the very least, it makes your life more difficult. The banker’s recommendation adds an unnecessary step to the process, which can delay getting the trust set up. Plus, it might add the additional burden and cost of filing another tax form each year.

Attaching a debit card or credit card to the trust, or authorizing more than one person to sign checks.

Attaching a debit card or credit card to Miller Trusts is also risky. Only one person should be named as the trustee. Managing the trust (making deposits and disbursements) must be delegated to a single individual. The use of debit and credit cards is fraught with danger.

First, there is the potential for fraud or theft. Anyone with access to the cards can withdraw without authorization. Funds may be used for purposes not allowed by the provisions of the trust, putting the trust at risk for disqualification. Disbursements from the trust must meet Medicaid’s timeliness rules, too. A purchase made with a credit card does not deplete the balance in the account until payment for the purchase is sent to the credit card company. Medicaid rules require funds to be withdrawn by a certain date based on it’s date of deposit.

The overriding purpose of a qualified income trust is for the patient to meet the requirements for Medicaid eligibility under State laws. Its sole purpose is to provide for the health, maintenance, and support of the care recipient as stated in the trust document. Use it any other way and Medicaid could deny the trust.

Not keeping careful records

Keep careful records for your income trust if you want to maintain benefits once approved. An itemized list of all expenses related to the patient will help immensely when it comes time to review your trust with a Medicaid caseworker. Make sure you have all the monthly statements in order, and make sure that your account is balanced each month. If you don’t, you could be disqualified from Medicaid benefits and have to start the Miller Trust process all over again. Staying on top of your paperwork is worth the time. It’s important for a better quality of life for you and your loved one in the long run.

Miller Trust in Harris County, TX

Not using an elder law attorney to guide you.

When it comes to setting up a Miller Trust for your loved one, don’t take chances and try to do it alone. Not using an elder law attorney can be detrimental to the process, leading to costly mistakes. A Texas elder law attorney will have the experience and expertise necessary to ensure that your loved one can qualify for Medicaid benefits.

Someone like us.


Setting up a Miller Trust can be complex and requires precise paperwork. To guarantee that your Miller Trust is 100% compliant, it’s best to consult with a law firm that understands the complexities of Medicaid eligibility rules and knows what is needed to set up a qualifying income trust.

Get your free Miller Trust Medicaid review. Call our office today – 713-970-1300.