A “Miller Trust” is an trust that is designed to receive the income payable to a person and then distribute that income in accordance with specific rules.

Miller Trusts are typically used to address people who are “gapped” on receiving nursing home benefits from Medicaid.  In order to qualify for Medicaid, you must have an income of less that approximately $2,000 per month.  However, the average cost of a nursing home is over $4,000 per month.  That creates a “gap” of no coverage for people who earn more than the Medicaid rate but less than the cost of the nursing home.

For example, let’s say that Bill receives $600 a month in social security and $1,800 a month from a pension.  Bill needs to stay in a nursing home, but the cost is $4,500 per month.  Bill makes $2,400 per month, so he does not qualify for Medicaid assistance.  What can he do?

Bill can set up a Miller Trust and assign his income to the trust.  Bill can then qualify for Medicaid assistance for the cost of the nursing home.  Bill’s income is paid into the trust each month and the trust will pay whatever Bill’s portion of the costs are determined to be.  When the trust is terminated, either by Bill or when Bill passes away, Medicaid will have lien rights on any amounts remaining in the trust.

Miller Trusts are not designed to protect assets or accumulate wealth for distribution to heirs.  Medicaid will have a right to any money left over in the trust.  However, Miller Trusts provide a method of obtaining Medicaid assistance and essentially deferring a portion of the costs until the trust terminates.