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Why Qualified Income Trust or Miller Trust Funding is Important

Why Qualified Income Trust or Miller Trust Funding is Important
Medicaid Planning
Jason Neufeld
April 11, 2020

Properly Funding a Qualified Income Trust is Important

As a brief overview: Qualified Income Trusts (a/k/a income-only trust, medicaid income trust, miller trust, or d4B trust … these are all synonymous terms) are needed for those with too much income who want to become eligible for Florida Medicaid Long Term Care benefits (either at home or in an ALF via a Medicaid waiver program; or in a nursing home through the Medicaid ICP program).

I have previously written an article that explains how you calculate what portion of income should go into a Medicaid income trust. The short answer is: all gross income  (from all sources) that exceeds the Medicaid income cap, must be deposited into an established income only trust for each month Medicaid eligibility is desired.

Here is a link to another article that further describes when do I need a qualified income trust or miller trust in Florida that will delve into that topic in greater detail.

This Florida elder law attorney article seeks to highlight:

Why properly funding a Medicaid Income-Only Trust is important every month!

I occasionally have people come to me with a few erroneous assumptions:

  1. that if the Miller Trust is properly drafted and signed, Medicaid will deem that sufficient compliance;
  2. if the Medicaid Income Trust account is opened and funded only for the first month, then DCF/Medicaid will deem that sufficient compliance (and won’t check in periodically); and
  3. if the Medicaid Income-Only Trust is partially funded, then DCF / Medicaid will see the “good effort” and deem the trust in compliance.

To illustrate why all these assumptions are wrong, an actual 2018 Fair Hearing is instructive. A fair hearing is a Medicaid applicant’s chance to appeal a rejection, denial or discontinuance of Medicaid benefits.

What happens if a Qualified Income Trust is Not Properly Funded?

In Petitioner v. Florida Department of Children and Families, Appeal No. 17F-00680 and -00755, the petitioner applied for Institutional Care Program Medicaid Benefits (i.e. nursing home Medicaid) in August, whose income was $1,046 above the Medicaid income limit (so Medicaid law required, at that time, for that amount - or more - to be deposited into a Miller Trust for each and every month the applicant desires Medicaid benefits.

In August only $1,000 was deposited into the Qualified Income Trust.

In September, no money was deposited into the Income-Only Trust.

As a result, Medicaid benefits were denied for August and September. The petitioner sought a hardship waiver for these months by arguing that the Medicaid applicant’s spouse (who was living alone, under great stress) had limited ability to properly fund the Medicaid income trust and if she had to pay out of pocket, it would cause great hardship to the community spouse.

Even though the income trust was only underfunded by $46.00 for the month of August, Medicaid benefits were denied. Even though a properly drafted trust was in existence, because it wasn’t properly funded, benefits were also denied for September. The hearings officer rejected the argument that the community spouse was unable to properly fund the QIT due to a hardship.

In summary, part of the reason you want to consult with an experienced elder care lawyer, who focuses on Medicaid planning, is more than just acquiring a good income trust.  It is also so you can really understand how these Miller Trusts work, when income can be kept and when it has to go to a facility, and to get expert instruction on how to properly fund the trust each and every month.

The case workers at the Florida Department of Children and Families (the agency that runs Florida’s Medicaid programs) are good people, but they have to follow the law. The law requires Medicaid income trusts to be properly funded and when they are not - you do not get a free pass for effort, because timing is important. Using the hardship defense is for incredibly limited circumstances and is not likely to be successful.

To learn more about Medicaid Income-Only Trusts, Qualified Income Trusts or Miller Trusts in Florida, please call to schedule a consultation.

Qualified Income Trust Funding Resources

Video: What is a Qualified Income Trust?

Video: How much money do I put into a Qualified Income Trust?

Are there any restrictions on Qualified Income Trust fund spending? 

Jason Neufeld

Jason Neufeld is the Founder and Managing Partner of Elder Needs Law, a Florida estate planning and elder law firm he created in 2017. With more than 15 years of experience practicing law, he represents clients in a wide range of legal matters, including Medicaid planning, estate planning, elder law, probate, Medicare, and life insurance.

Jason received his Juris Doctor from the University of Miami — School of Law and is a member of the Florida Bar and the Broward County Bar Association. He has received numerous accolades for his work, including being named a Rising Star and Super Lawyer by Super Lawyers and among the Florida Legal Elite by Florida Trend in 2024.

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