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Medicaid Trusts AKA Miller Trusts AKA Qualifying Income Trusts


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By Ana Ballesteros, W M Law Paralegal

When it comes to healthcare needs, we always try to delay the inevitable, prepare for our future needs. The average cost of per month for an elderly care facility is about $6,000 plus hospital visits and expensive medicine costs.

The way Medicaid works is that they can help you pay for your expenses but only if your income shows that you do not have sufficient money to pay the care you need. So, what happens when your income qualifies but your spouse also works, and it puts you above Medicaid’s income requirement? Or what happens if your income qualifies but you have your house paid for and perhaps some additional assets like an IRA/401(k) or a vacation home?

Medicaid can put liens on your property after you no longer need the assistance program or have passed away. The bad news is that if you do not take protective measures, you can lose all the items you worked hard for. The good news is that there is a special trust that you can create to protect your assets and ensure they can be passes on to your family like you have always intended them to be, it is called a Medicaid Trust also known as a Qualifying Income Trust or Miller Trust from a 1990 Colorado case of Miller v Ibarra.

Things to be aware of when creating your trust are: The Trustee cannot be the beneficiary of the Trust. This means that if the Trust is meant to be protecting your spouse’s assets, your spouse cannot be the Trustee. There is can be up to a 5-year look back period when creating your Trust. This means that if you created your Trust up to five years prior to applying for Medicaid, Medicaid has an ability to obtain your property to offset the amount of money they paid for your care.

Medicaid rules differ from state to state and because of that variance, it is important to speak with an attorney to ensure that your assets are being taken care of adequately. There are many ways that not setting up your trust correctly can cause Medicaid to obtain some if not all your assets. The sooner you start your Estate Planning, the more help it will be down the road.