Miller Trusts -What are They?

When it comes to the law, sometimes even the things that should be simple are made difficult by all sorts of information and forms that need to be filled out. In this topic, we’ll look at one of those potential forms: The Miller Trust.

A Miller Trust is the same thing as an “Income Cap Trust,” another term you might have heard, and that’s also the same as an “Income Assignment Trust.” It is given this name because, when the trust is created, the patient assigns his or her right to receive both social security and pension to the trust. With all these names, it’s no wonder people get confused by the law! 

Now, you might be thinking, “That’s great and all, but what does this thing actually do?” That is a perfectly legitimate question, and the answer is that the Miller Trust solves a particular problem—that of a person who is applying for ALTCS (that is, Medicaid) having too much income. It is so specific in this area that it was not created for any other purpose.

If an individual is going to be receiving care at home and not in an institutional setting, he or she should assign only enough income into the trust to stay eligible for the program. This is due to the patient not incurring a share of cost obligation if he or she gets cared for at home. The funds will then build up in the Miller Trust and have to be paid back to Medicaid upon death of the patient in order to reimburse the program for the accumulated cost of care for the patient.

If the patient is being cared for at a nursing home or other care facility, there isn’t really any clear advantage to keeping certain income items out of the Miller Trust. That’s because Medicaid will assess a share of the cost that will prevent considerable funds from building up in the Miller Trust.

So, now that you know what it is and what it does, let’s look at who can create such a trust. If a patient cannot create the trust on their own, their agent can, but only if they have made a power of attorney for finances beforehand. Medicaid is usually pretty lenient in allowing this, even if said power of attorney doesn’t plainly give the go-ahead to create the trust. If, however, the patient is too disabled to know that he or she is creating a trust, and if he or she has not granted financial powers to another, court conservatorship will then be necessary before creating the Miller Trust.

Hopefully now you’ve got a better handle on at least one of the many things that have the potential to cause a great deal of confusion in what is already a confusing enough time on its own. Now, perhaps you can breathe a little easier.