A Miller Trust is a special kind of trust that adjusts the income of a person downward, usually in an effort to maintain the individual’s eligibility for some forms of government benefit programs. This type of trust is often used to establish eligibility for the Medicaid program.
To qualify for Medicaid, the income of the applicant must be below a set amount. Each state determines the amount of income the applicant cannot exceed because Medicaid is administered at the state level.
Do I need a Miller Trust if I live in Florida?
In income cap states, such as Florida, Medicaid applicants who have income that is above the income cap cannot qualify for Medicaid unless they put excess income in a Miller Trust. In Florida, the current income cap determined by Medicaid is $2,349.00 per month as of January 1, 2020. However, the Medicaid income cap changes periodically.
The Medicaid income gap considers an applicant’s gross income, the amount before deductions, from all income sources including social security, alimony, employment, retirement plan disbursements, and etc. As a result, if a Medicaid applicant’s total gross income is over the income cap, their application will be denied.
How does a Miller Trust help Medicaid Applicant’s meet the Income cap?
A Medicaid applicant can become eligible for the program by redirecting income to a Miller Trust. This adjusts the income of the applicant downward because the income that is part of this special kind of trust is not counted when determining whether the applicant is eligible for the Medicaid program. Therefore, the Medicaid income cap would only consider the applicant’s total gross income minus the amount that is redirected to the Miller Trust.
For example, if a Medicaid applicant has a total gross income of $2,500 but the income cap is $2,349, the applicant would not qualify for the Medicaid program because the applicant’s income is more than the state’s Medicaid income cap. However, if a Miller Trust is established, the extra income could be deposited into a separate account for the Miller Trust. This account is called a Qualified Income Trust Account. Then, the Miller Trust trustee can write a check from the trust account to pay the Medicaid applicant’s share of their cost of care.