A Miller Trust, or an Income Only Trust, is a type of Irrevocable Trust. You can use this trust to help you qualify for Medicaid. In this article, we will go over the basics of how a Miller Trust works in the State of Arizona.
Arizona Long Term Care System (ALTCS)
ALTCS is the Medicaid system in Arizona that provides in-home or long-term care for individuals who meet certain financial requirements. This includes maximum income requirements. In 2021 you cannot have more than $2,382 in monthly income to qualify for these benefits. If your income goes over this amount, a Miller Trust can help you to qualify.
How It Works
If your monthly income exceeds the maximum requirement but is less than $6,905.11 (for Pima and Maricopa County residents) or $5,667.81 (for all other Arizona County Residents) you may want to utilize a Miller Trust. A Miller Trust allows you to divert your income. This lowers your monthly income calculation and can help you to qualify for ALTCS. You must deposit any excess Social Security or pension income into a bank account in the name of the Miller Trust.
Spending Trust Funds
There are restrictions on how you can access and spend funds that are in the trust account. First, you can utilize funds for share costs. This refers to medical costs that ALTCS does not cover. If you acquire any of these expenses, you can use your Miller Trust funds to pay. Typically, this is only applicable if you are residing at an institutional nursing facility. Second, you and your spouse are also allowed to receive a small monthly personal allowance from the trust.
Before you create a Miller Trust, there are some additional points you should take into consideration. First, a Miller Trust is an Irrevocable Trust. This means that once it is set up there is not much ability to make changes. Second, once you pass or cease to receive ALTCS services, the state is the first in line to receive reimbursements for expenses they paid on your behalf. Third, there are certain income sources that do not factor into your monthly income calculation. These sources include VA aid and attendance, VA reduced pension, vocational rehabilitation, income tax refunds, specific types of annuity payments, and agent orange payments.
Setting Up a Miller Trust
If you feel like a Miller Trust is right for you, your next step will be to schedule an appointment with a qualified legal company. Once your trust is signed, you will also want to file for an EIN and set up a bank account for it.
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