Miller Trusts

When you reach a point in your life that you are ageing, you may need to qualify for Medicaid Long-Term Care Benefits for nursing home care. Arizona’s Medicaid system is called the Arizona Health Care Cost Containment System, or “AHCCCS” (often pronounced “access.”) The Arizona Long Term Care System is called “ALTCS” (often pronounced All-Techs.”) To qualify for ALTCS in Arizona, an income cap state, a person without an eligible spouse must not have an income that exceeds $1,752 per month, and a person with an eligible spouse must not have an income that exceeds $2,628 per month. A person exceeding this cap by even $1.00 will not be eligible for benefits. A person’s dividends and interest, pensions, annuities, rental income, etc. are included in income. Medical insurance and income taxes are added back in to determine gross income as well. Healthcare is very expensive and some people may exceed the income cap for Medicaid, but still cannot afford the healthcare costs.  In this case, a Miller Trust becomes helpful.

The Miller Trust was created as a mechanism to divert income into a trust that is unavailable directly to the beneficiary. Income in Miller Trusts is not counted as income for determining Medicaid/ALTCS eligibility purposes because, per federal statute, only available income may be considered in determining eligibility. A Miller Trust, also known as Qualified Income Trust, is a trust created for a beneficiary who requires continuing medical and nursing supervision and assistance to care for and manage his or her financial situation. To comply with federal law, the trust is composed only of pensions, social security and other income to the individual. The State will receive all amounts remaining in the trust on the death of the individual up to an amount equal to the total medical assistance paid on behalf of the individual under a State plan under this title, though often there are no remaining assets in the Trust for the State to receive.

The Trustee must be someone other than the beneficiary of the trust, often a child or other family member.  The Trustee manages the income in the trust by making disbursements necessary for monthly personal needs allowance, monthly maintenance needs, cost of medical assistance provided, and withholding from disbursement any amounts necessary to keep the beneficiary eligible for Medicaid benefits.

If you have more questions, or to set up your Miller Trust, contact The Carroll Law Firm for a free estate planning consultation at (623)551-9366.


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