We draft a significant number of Miller Trusts in Florida (sometimes referred to as a “QIT” / “Qualified Income Trust” or a “Medicaid Income Trust” or just an “Income Trust”) for those who need Medicaid qualification assistance due to their income being above the Medicaid income limits. Clients often ask how much income should go into a Miller Trust that we prepare for them.
Currently, an income trust is required if a Medicaid applicant has income that exceeds the “Florida Medicaid Income Cap,” which changes from time-to-time (in 2018, the income cap is $2,250.00 for Medicaid nursing home or long-term care waiver programs, but it changes periodically). Click the link above for an article or the link below for a video that further discusses the basics of Income Trusts for Medicaid.
While I walk my clients through the entire process, I get a fair number of frequently asked questions related to Medicaid income trusts. This is understandable as people tend to be very nervous about making sure that they are doing everything right to ensure that their government benefits aren’t jeopardized. Some of the more common questions are:
Does all of my income have to go into the Qualified Income Trust?
Variations of this question include:
- How much of my income needs to go into a Medicaid Qualified Income Trust?
- If I get a VA Pension (or any other pension) does the entire amount have to go into the Income Trust?
The answer to this question is usually: no.
Strictly speaking, Medicaid / DCF will be satisfied as long as the amount of excess income - i.e. the amount that exceeds the income cap - is placed into the Qualified Income Trust each and every month. But, I always advise my clients to put more than the minimum amount to account for any discrepancies or fluctuations that may arise in monthly income.
Should all of my social security retirement income be deposited into a Miller Trust?
Variations of this questions include:
- How much of my SSI or Social Security Retirement Income should go into the Miller Trust / Income Trust?
- If I have multiple sources of income (e.g. i. social security; ii. retirement income from IRA distributions; and iii. VA Pension), which should I choose to go into the Miller Trust?
Medicaid applicants don’t have to choose an entire category of income and place the entire amount into the Miller Trust. Medicaid is simply looking at total numbers. I’ll explain using an example:
If my client receives $1,250.00/month from Social Security (before Medicare premiums are deducted) + $750.00/month from a VA Pension + $1,750 per month from a 401(k) that is $3,750.00 per month in total monthly income. Your elder law attorney would then deduct the income cap from your total gross monthly income to see if there is an excessive amount of income for Medicaid purposes. In our example:
$3,750.00 (total gross income) - $2,250.00 (current 2018 Income Cap) = 1,500.00 in excess income that must go into a QIT / Miller Trust every month in order to pass the Medicaid income eligibility test.
It doesn’t matter where that $1,500 comes from (as long as its from the actual Medicaid applicant’s own income).
So, if all the income (from SSI, VA and 401k) are deposited into one account - you would just set up an automatic transfer of at least $1,500 to go from that account into the Miller Trust account every month.
If, on the other hand, the Social Security check is deposited into Account A at Bank of America, the VA Pension is deposited into Account B at Suntrust, and the 401k income remains in an account at John Hancock; you could just set things up so $1,500.00 (or more) automatically transfers from John Hancock to the QIT account. Or you could transfer $1,000 from Bank of America and $500 from Suntrust to go into the Income Trust account per month. There are plenty of variations, but Medicaid won't care as long as the minimum correct excessive income amount is placed into the Qualified Income Trust.
As an Elder Law Attorney, I walk my clients through how to properly fund the Miller Trust / QIT / Income Trust, in what amounts, from which accounts, etc... every step of the way. I hope this helps. If you have any other questions or are interested in a Miller Trust, please call to setup a consultation.