Know Your Options This Long-Term Care Planning Month
As a member of the Elder Law Section of The Florida Bar and participating in the Statewide Exploitation Advisory Team, a task force created to assist law enforcement and Adult Protective Services in identifying and addressing instances of fraud, abuse, and exploitation, we urge you to plan for you and your elderly relatives' long term care now, before it becomes a crisis and your choices are limited.
---- Did You Know?
Miller Trusts Can Help You Qualify for Medicaid
Many seniors need Medicaid to pay for their long-term care but are surprised to learn that their modest monthly income may disqualify them. For Medicaid benefits, a single applicant cannot earn more than $2,523 (2022) in gross monthly income.
If you have more income and other expenses, a Miller Trust may help you resolve this issue. A Miller Trust is a Medicaid planning tool that can assist you in meeting the income limits and qualifying for Medicaid. Unlike other planning tools, Miller Trusts do not have specific disability or age requirements.
If your income exceeds Medicaid’s income limit, you can deposit the amount of your excess income into a Miller Trust – also referred to as a “qualified income” trust. Once it is deposited into this trust, it is not counted as income by Medicaid. However, a trust must be irrevocable to qualify, which means you cannot cancel or change it. Once you put money into the trust, you cannot get it back directly. However, the trust can pay certain expenses on your behalf.
A Miller Trust is a good option for any Medicaid applicant needing long-term care services, whether at home, in their community, or in a skilled nursing care facility. This trust is created by the applicant, a guardian, or a person with a properly drafted power of attorney. A trustee is chosen to manage the trust and the income deposited. Anyone other than the Medicaid applicant can serve as a trustee.
Once the trust is set up, the trustee establishes a bank account to receive excess income from the Medicaid applicant. The income can only be used for certain expenses. For example, it may be used to pay the personal needs allowance of an individual in a nursing home, Medicare premiums, bills not covered by Medicaid, or supplement costs of a nursing home.
Another requirement of a Miller Trust is that the applicant’s state Medicaid agency will be the beneficiary of any remaining funds in the trust upon the death of the Medicaid applicant.
Many who need Medicaid benefits do not know about this tool which can help anyone who earns over the maximum allowable monthly income.
YOU HAVE A TRUST SO NOW WHAT?
A trust itself is created by a trust document — and it’s just a document. Unless the trust is properly funded, it may not accomplish the goals anticipated by the trust creator or the trust’s beneficiaries. Let's use the metaphor of a bucket.
Think of a trust as a bucket that you place your assets (your stuff) into and then they can be carried around. So, during your lifetime, as the trustee of the trust (or bucket).
If you do not put your stuff into the bucket (i.e. real property, investments, and other assets), then your trust will not accomplish what you want it to, and your stuff will go to probate court upon your passing. Placing your stuff in the bucket (trust) is called "funding your trust".
We work with many families that have to go through probate because their relatives did not properly fund their trust (place their trust in the bucket). Now is an excellent time to review your trust to see what other assets (or stuff) you can place into your bucket!