Primer on Miller Trusts
Presented to REAL Services, Inc., July 20, 2012
© Copyright 2012, Douglas D. Germann, Sr. PC, Elder Caring Attorney
Questions? Call Doug at 574/291-0022, or contact him at
[email protected] or fax 574/291-0024
www.SouthBendElderCARINGlaw.com
Starting points
- Rare:
- Waivers
- Income above 3 times SSI limit $698 X 3 = $2094 in 2012 (Special Income Level, SIL)
- Why?
- If above the SIL, must spend down to the SSI limit
- If income is $2000 per month, no spend down; if $2100, spend down is $1402
- Irrevocable—but can reserve ability to amend
- Called:
- Miller Trust
- Qualified Income Trust
- Income Cap Trust
- Income Assignment Trust
- (d)(4)(B) Trust (42 USC 1396p(d)(4)(B))
Parties
- Settlor/Grantor: Recipient or applicant
- Beneficiary: Recipient, spouse (to extent of Minimum Maintenance Allowance)
- Trustee: Adult child, caregiver, but usually not the recipient
Show me the money
- Money in:
- If all, then immediately distribute $2094 to recipient
- If only that above $2094, then hold
- Only the recipient’s income + interest
- Nothing else
- No one else’s money
- Goes in after having been received by recipient; cannot be assigned ahead of time
- Not considered a transfer violation
- Cannot accumulate indefinitely (funds in the Trust do not count against the $1500 maximum)
- Good to do by automatic transfer within the bank (need to change annually or whenever income changes)
- Money out:
- Funds if any remaining at death go to state to repay
- For sole benefit of spouse (spousal allocation will be established)
- Only while the trust exists
- Trust cannot be terminated and distributed to any other entities for any purpose
- Health insurance premiums, including Medicare supplement
- Medical expenses not covered by MA
- OTC medicines if Doctor note
- Medical care including HCBS and NH
- Old medical bills for past services from before time on MA (but if MA budgeted for it out of the prior month’s income ($2094), do not pay out of the Miller Trust)
- Assisted living
- Administration, legal fees
- Rx copayments
- Medical equipment, if we can prove medically necessary (but why didn’t MA pay for it?)
- Trustee fees
- Funeral expenses probably
- Payments out stop at death, so it is best to pay the bills as they come in
- Bank service charges
What we need to show Medicaid
- What the caseworker needs to see
- Copy of the signed trust
- Verification that the bank account has been opened
- Records of every penny in and every penny out
- Receipts, invoices
- Doctor notes, such as for over the counter meds
Administration
- Name on account: “[client] Qualified Income Trust”
- Income taxes:
- Separate EIN or beneficiary’s SSN?
- The Grantor is taxed on all income generated by this trust, and all income placed in the trust
- Make sure CPA or tax preparer is aware of the trust and all its transactions each year
- Termination:
- Death of recipient
- Termination of waiver services with no likelihood of resuming
- Pay to state
- When to establish?
- When the person is eligible, that is has assets below $1,500
Other matters
- No co-mingling of other money: not from Grantor, not from Trustee, not from any other person or source
- The amounts to go into the Miller Trust will usually change annually, and any time there is a change in income
- Grantor may not write checks: only the Trustee has this authority
- Two separate bank accounts: Recipient’s own; Miller Trust’s