Do Miller Trusts Protect Assets?
Few people today can afford the high cost of nursing home care, which can run in excess of $90,000 per year. It takes planning to find ways to pay such costs. Medicaid will only help individuals who make below a certain threshold income. A Miller Trust can be a good solution for some who are trying to qualify for Medicaid. A College Station Miller Trust attorney can help you decide if this is the right option for you.
What Is a Miller Trust?
Many people have the impression that Miller Trusts are a good way to shelter assets. However, this is not the case. Miller Trusts, now known as Qualified Income Trusts (QIT), are meant to reduce a person's income in order to qualify for Medicaid and pay for authorized bills. There is no other purpose to a Miller Trust.
Medicaid is designed for low-income individuals. It is ideal for paying nursing home costs. However, you cannot have a gross monthly income above a certain level, which is $2,163 for 2014. If your income is higher, you will need a Miller, or Qualified Income Trust.
Your College Station Miller Trust attorney will tell you that a Qualified Income Trust is fairly easy to set up, but needs to be maintained properly. To create an account, simply apply at your bank. You then place any income in excess of the qualifying amount for Medicaid into the account. The stipulation is that the money in the account is used to pay certain authorized bills, after which the remainder goes to pay for nursing home care. Thus, you never have a remaining balance in the account after a given month.
What about My Spouse?
The QIT helps defray the cost of nursing home care. Medicaid pays the remainder. However, if you have a spouse at home, Medicaid will allow you him or her to use a portion of the QIT before the remainder goes to paying Medicaid. The purpose of this is to ensure that your spouse has enough income to support his or her needs.