Creating a Miller Trust in Florida can help you become eligible for your Medicaid application if you’re struggling to meet the income or asset limits. Miller Trusts can be great for families who earn a respectable income but are not wealthy enough to fund nursing home costs and long-term care costs alone.
What Are Miller Trusts?
Miller Trusts (also referred to as ‘Qualified Income Trusts’), are a type of legal entity used by Medicaid applicants to hold income that exceeds Medicaid income eligibility limits.
By having the Miller Trust hold the excess income, it is no longer countable and can allow the applicant to proceed with their application successfully.
Miller Trusts take their name from a court case in 1989, where Ms. Jeanette Miller argued that as her income was in a trust, it was not accessible to her and thus she should have been eligible for Medicaid.
Read Related: Top Myths About Medicaid Planning in Florida
Do I Need a Miller Trust for My Medicaid Application in Florida?
If your income exceeds Florida’s Medicaid income limits, you must consider alternative ways to become eligible legally. Usually, the best way to do this is by using a Miller Trust.
In 2023 Florida’s nursing home application income cap is $2,742.
However, it’s advised that you speak directly to a Florida Elder Law lawyer who can help you find the optimal solution.
View our guide to Florida Medicaid eligibility and income limits here.
How Can A Miller Trust Help With Your Medicaid Application?
Miller Trusts work by holding the Medicaid recipient’s income.
Every month, the applicant should deposit their income directly into the Miller Trust. These funds will then be distributed by the Trustee to pay for ‘allowable deductions’ and Medicaid costs. Medicaid is the primary beneficiary of the trust.
Countable Income
Countable income is money that you have access to spend freely. If it’s placed into a Miller Trust, it’s no longer accessible for you directly and instead is saved for Medicaid-approved expenses.
How Much Do I Need to Put into My Miller Trust?
Technically, you only need to put the excess amount of income into the trust, but it’s often advised that you funnel all of your monthly income through the Miller trust, minus your personal needs allowance ($130.00 in 2023).
For example, if you earn $5,000 a month then you should put $2258 into the Miller Trust to lower your countable income. Because certain monthly payments may change from month to month, it is advisable to put more than $2258 to account for such changes.
You cannot give your excess income to someone else. For example, you shouldn’t make payments to your partner or children. Your trust and your accounts will be checked by Medicaid, meaning any attempt at hiding transactions will result in a penalty period.
What Happens to a Miller Trust When I Die?
Upon the death of the Miller Trust owner, the remaining balance is sent to Medicaid to pay as reimbursement for care costs. This will not exceed the costs that were paid, but it is usually unlikely that there are funds in the trust that are greater than what Medicaid covered.
What Can a Miller Trust Pay For in Florida?
The income deposited into your Miller Trust can only be spent on ‘allowable expenses’.
These include:
- The applicant’s share of long-term care costs.
- Medical bills not covered by Medicaid or Medicare premiums.
- Personal Needs Allowance ($130 per month for nursing home residents in 2023).
What Can a Personal Needs Allowance Buy in Florida?
The $130 per month of Personal Needs Allowance (PNA) can be spent by nursing home residents on ‘personal items and services’. These are typically low-value items that affect the quality of the resident’s day-to-day life but are not assets that would count toward Medicaid eligibility.
Common examples of PNA expenses include:
- Clothing
- Shoes
- Snacks
- Dietary foods
- Multivitamins
- Hygiene products
- Haircuts
- Magazines
- Books
- Knitting needles and similar hobby items
- Greeting cards
- Postage costs
- Cigarettes
- Cell phone bill
What If I Don’t Spend All of My PNA in a Month?
The accumulated funds count as an asset, which could be a problem if those funds add up to exceed Florida’s Medicaid asset eligibility limit. Therefore it’s advised that you spend your PNA.
Is There a Miller Trust Limit?
While some states have a limit to how much income can be deposited into a Miller Trust, Florida does not, which allows for ample flexibility over who can apply for Medicaid.
The Key People Involved in a Miller Trust
The following parties are involved in the creation, funding, distribution and reception of a Miller Trust.
- Grantor: The person who created the trust – usually the Medicaid applicant.
- Trustee: An individual selected to manage the Miller Trust and distribute the funds every month. This is usually a close friend, family member or attorney.
- Lifetime Beneficiary: The person receiving Medicaid support
- Primary Beneficiary: Florida’s Medicaid agency.
- Secondary Beneficiary: Remaining funds will be given to the secondary beneficiary, which can be anyone the Grantor wishes. However, most Miller Trusts will be empty after the Medicaid agency is reimbursed its funds
How to Create a Miller Trust for Medicaid Eligibility in Florida
If you want to create a Miller Trust to help with Medicaid eligibility in Florida, you will have to draft and execute the appropriate trust document and open a trust checking account.
This is far from easy and any small mistake could lead to a Medicaid penalty, potentially barring you from eligibility for several years.
It’s highly advised that you contact a Florida Medicaid planning attorney who can assist you through the process. Our attorneys will take care of the complicated work, so you and your family can relax knowing their future is in good hands.
For example, you will need to provide appropriate proof of income distribution arrangements, which, to the average person, can be overwhelming.
Hire a Medicaid Planning Attorney in Riverview
If you or a loved one wish to create a Miller Trust in Florida, then our Florida Medicaid planning lawyers can help. We can take a look at your circumstances and determine if creating a Miller Trust is best to gain Medicaid eligibility, or if you should consider an alternative route.
We can also assist you with spending down your assets to qualify for Florida Medicaid.
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Battaglia, Ross, Dicus & McQuaid, P.A. is U.S. News and World Reports Tier 1 law firm in Florida, specializing in Estate Planning & Probate since 1958. With award-winning, experienced estate planning attorneys, they can help you plan for the future today.
