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Miller Trust vs. Living Trust: What Florida Families Need to Know
Watch our detailed video explanation below to see these concepts in action
When families in Florida face the challenge of paying for long-term care, they often encounter confusing terminology around different types of trusts. Two documents that frequently come up in conversations are Miller trusts (also called qualified income trusts) and revocable living trusts. While both are trusts, they serve completely different purposes and solve very different problems.
If you're feeling overwhelmed by these options, you're not alone. Many Florida families find themselves in situations where they need to make important decisions quickly, often while dealing with a health crisis. Let's break down these two tools in plain language so you can make informed decisions for your family.
What is a Miller Trust and When Do You Need One?
A Miller trust, officially called a qualified income trust, exists for one specific reason: to help Florida residents qualify for Medicaid long-term care benefits when their monthly income is too high.
Florida's Income Limits for 2025
In Florida, if you're applying for Medicaid to help pay for nursing home care or home and community-based services (like assisted living or home health care), your monthly income cannot exceed $2,901 in 2025. This limit includes everything you receive each month:
- Social Security benefits
- Pension payments
- IRA or 401(k) distributions
- Rental property income
- Any other regular income sources
How Miller Trusts Work in Practice
Let's say your monthly income is $3,200. Since this exceeds Florida's $2,901 limit by $299, you wouldn't qualify for Medicaid without additional help. A Miller trust solves this problem by creating a legal place to put that excess $299 each month.
Here's what happens:
- You (or someone with proper power of attorney) create the Miller trust
- Each month, the excess income ($299 in this example) goes into the trust
- The money immediately comes back out to pay for your health and medical expenses
- Your countable income for Medicaid purposes is now $2,901, making you eligible
Think of it as a legal funnel that temporarily holds your excess income before using it for your care.
Important Details About Miller Trusts in Florida
Miller trusts don't accumulate wealth. Money flows in and immediately flows back out to pay for care-related expenses. Most days, the trust balance should be close to zero.
When the Medicaid recipient passes away, Florida law requires that any remaining funds in the Miller trust go to the state before family members receive anything. However, since these trusts don't typically build up significant balances, this rarely becomes an issue.
Not every power of attorney document allows someone else to create a Miller trust on your behalf. The document must be properly drafted and Medicaid-compliant. Spouses can create Miller trusts for each other in most circumstances.
What is a Revocable Living Trust and How Does it Help?
A revocable living trust serves an entirely different purpose. While Miller trusts deal with income problems for Medicaid eligibility, revocable living trusts primarily help families avoid probate court when someone passes away.
How Living Trusts Function
When you create a revocable living trust in Florida, you typically serve as the trustee (the person in charge) and the primary beneficiary (the person who benefits) during your lifetime. You maintain complete control over all assets in the trust.
If you become unable to manage your affairs, a successor trustee you've chosen can step in seamlessly to handle your financial matters. No court involvement is necessary.
When you pass away, assets in the trust transfer directly to your chosen beneficiaries without going through Florida's probate process.
Why Living Trusts Don't Help with Medicaid Planning
Since you maintain complete control over assets in a revocable living trust, Florida's Medicaid program counts these assets as if you own them directly. Putting assets into a revocable living trust won't help you qualify for Medicaid benefits.
Similarly, you don't put income into a living trust, so it won't solve income-related Medicaid eligibility issues.
When Living Trusts Can Indirectly Help with Medicaid
While living trusts don't directly assist with Medicaid planning, they can provide some indirect benefits:
Probate Avoidance: Assets that pass through your living trust avoid probate court. Since Florida has estate recovery programs that can claim against probate assets to recoup Medicaid expenses, avoiding probate may reduce the state's ability to recover funds from your estate.
Seamless Management: If you develop dementia or become incapacitated, your successor trustee can manage your affairs without court intervention, making it easier to handle any necessary Medicaid planning strategies.
Key Differences at a Glance
Miller Trust
Revocable Living Trust
Solves income problems for Medicaid
Primarily avoids probate
Used only for long-term care Medicaid
Used for general estate planning
Handles excess income temporarily
Holds assets permanently
Money flows in and immediately out
Assets remain until death or incapacity
Required when income exceeds limits
Optional planning tool
Must benefit state after death
Benefits chosen heirs
Which Trust Do You Need?
The answer depends entirely on your situation:
You might need a Miller trust if:
- Your monthly income exceeds $2,901 (2025 limit)
- You need nursing home care or home-based services
- You want Medicaid to help pay for long-term care
- You have no other way to reduce your countable income
You might benefit from a living trust if:
- You want to avoid probate for your heirs
- You own real estate or significant assets
- You want seamless management if you become incapacitated
- You prefer privacy (probate is public record)
You might need both if:
- You have income above Medicaid limits AND want probate avoidance
- You're planning for both immediate Medicaid needs and long-term estate planning
Common Misconceptions
Many people believe they can solve Medicaid income problems by putting money into a living trust. This doesn't work because you maintain control over living trust assets, so Medicaid counts them as yours.
Others think Miller trusts will protect assets for their family. Miller trusts only deal with income flow, not asset protection, and remaining funds go to the state after death.
Getting the Right Help for Your Situation
Both Miller trusts and living trusts require careful drafting to work properly under Florida law. A Miller trust that doesn't comply with Medicaid regulations won't help you qualify for benefits. A living trust that doesn't properly transfer assets won't avoid probate.
More importantly, these tools work best as part of a comprehensive plan tailored to your family's specific needs and goals.
Take Action Today
If you're facing long-term care costs in Florida, time often works against you. Medicaid planning becomes more limited once you're already in crisis mode.
Whether you need help with immediate Medicaid qualification through a Miller trust, long-term estate planning with a living trust, or a combination of strategies, getting qualified guidance makes all the difference.
Additional Resources
For more detailed information about Medicaid planning strategies and estate planning in Florida, check out our comprehensive guide: "Medicaid Planning: How to Pay for Some of Your Long-Term Care Expenses" available on Amazon.
Visit our websites for more helpful resources:
Remember, every family's situation is unique. What works for your neighbor might not work for you. The key is getting personalized guidance that takes into account your specific income, assets, health needs, and family goals.
Don't wait until crisis strikes. The best time to plan is before you need care, when you have the most options available to protect your family's financial security.
