In states that apply a "cap" to income, qualifying
for Medicaid assistance can be difficult even for seniors who have
less than $2,000 in resources. Their income is too high to
qualify. This puts them in the unfortunate position of having too
much money to qualify for Medicaid help, and not enough to pay for
the care they need.
Several years ago this was the unfortunate situation that put many
seniors at risk. They remained at home, often receiving
substandard care from family members who were stretched, through
no fault of their own, far beyond their abilities. Some died, or
their families quit their jobs, sold their own homes, and made
other impossible choices to see to it that their loved ones got
professional care.
Thankfully, legal authorities recognized the problem and
instituted a "fix" designed especially for these "income rich"
individuals living in income cap states.
The Qualified Income Trust (QIT) or Miller
Trust
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A QIT or Miller Trust is a special trust account
set up in a local bank for the benefit of the senior. All income
is deposited into this trust account, rather than into an account
in the name of the senior. Because the Trust is receiving the
income, the senior effectively has no disqualifying income and
will financially qualify for Medicaid if his or her resources are
below $2,000.
Each month the person appointed as Trustee for the Qualified
Income Trust account must use the money in the account to pay all
authorized bills. Once these bills have been paid, the remainder
of the money in the account goes to pay the senior's nursing home
bill. Because there will not be enough to cover nursing costs,
Medicaid will pick up the difference between the money available
from the Trust and the actual cost of care.
Because all the money in a Miller Trust account is spent each
month (with the possible exception of a very small amount to keep
the account open) it will never build up to become a disqualifying
asset.
If the senior has a spouse remaining at home, if necessary
Medicaid will allow some or all of the Trust income to be
"diverted" to the spouse at home before it goes to the nursing
home. In this way the spouse remaining at home will have
sufficient income to live on. The amount that can be diverted from
a Miller Trust depends entirely on the amount of income the spouse
at home receives in his or her own name.
A Qualifying Income Trust, or Miller Trust, should be set up by an
attorney who has experience with QITs. It is not always the right
solution or appropriate for everyone needing nursing home care,
nor is it a do-it-yourself affair. If this sounds like something
that might be helpful in your situation, please consult with a
legal professional before proceeding. The money you will spend on
professional assistance will be far less than what you could lose
by making a serious error.
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