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What is a Miller Trust?

Medicaid is a government program that provides healthcare coverage to individuals with low income or disabilities. In order to qualify for Medicaid, individuals must meet certain financial eligibility requirements, which include limits on income and assets.

A Miller Trust is designed to help individuals who have too much income to qualify for Medicaid. If someone has too much income to meet the limits to qualify for ALTCS – yet not enough to pay for care on their own – a Miller Trust can help by allowing a person to assign their income to the Miller Trust.  This could be money from social security, a pension, specific types of annuities, etc. The trust allows them to deposit their excess income into the trust, which is then used to pay for their medical expenses, thereby reducing their countable income for Medicaid eligibility purposes and can help them qualify for Medicaid benefits.


How does a Miller Trust redirect income?

There are income caps on the maximum amount of money you are able to earn in order to qualify for ALTCS. For example, in Arizona as of January 2023, you are only able to earn $2,742 monthly. If a person earns more than the monthly maximum to qualify for ALTCS, they may not be eligible for Medicaid. Instead of being disqualified due to their income, a person can redirect some of their income into the Miller Trust. 


What are the Steps to Putting Money in a Miller Trust?

To redirect income into a Miller Trust for purposes of qualifying for Medicaid, 

  1. First the trust needs to be set up;
  2. Next, open a bank account in the name of the trust;
  3. Then, the person opening the Miller Trust would deposit their income directly into the bank account titled in the name of the Trust. 


What are the requirements for setting up a Miller Trust? 

Typically, to set up a Miller Trust, the person seeking to open the trust would be someone who needs ALTCS because they need access to long-term care. This person would either need to have the mental ability to understand the trust and its consequences, or, if they are now incapacitated, they would have needed to specify in their financial power of attorney that their trusted agent has the authority to set up a Miller Trust on their behalf. A spouse can also create an Income Trust on their behalf. 


What happens to the money that gets deposited into the Miller Trust? 

Money that gets deposited into a Miller Trust can be used for certain expenses that are not covered by ALTCS.  These include: 

  • If money is leftover in the Miller Trust, the state is able to recover that money after the person passes away. 
  •  Anything leftover after repaying those expenses is distributed to the person’s beneficiaries that they originally specified in the Miller Trust when it was first set up. 

The Miller Trust is subject to strict rules and regulations, and must be established and administered in accordance with state law. Because of this, this kind of trust is typically set up with the assistance of an attorney who specializes in Medicaid planning.

If you have questions about how to set up a Miller Trust, contact an experienced attorney at Windrose Law Center to help.