Trust Can Help Some Qualify for Nursing-Home Medicaid

Wesley E. Wright (Partner, Texas) and Molly Dear Abshire (Partner, Texas) recently published an article entitled, Trust Can Help Some Qualify for Nursing-Home, Senior Living Section, Houston Chronicle. Provided below is their article:

Medicaid Elderlaw attorneys are often asked this question: I applied for long-term care Medicaid benefits for my mother, who doesnot own any assets and lives on her monthly teachers retirement check.  This is the only money she has, and it paysfor her care.  Why was she deniedeligibility? 

Acommon reason for denial of long-term care Medicaid benefits is too muchmonthly income.  

UnlikeMedicare, Medicaid is a means tested program that considers assets as well asincome.  Basic categorical requirementsfor Medicaid eligibility include, being a US citizen or resident alien, 65 yearsof age, blind or disabled, and having a medical necessity for daily nursingcare.  Medicaid imposes strict assetlimits for single and married applicants, and it puts a cap on the amount of grossmonthly income an applicant may receive. 

Toqualify for nursing home Medicaid, the applicant’s gross monthly income fromall sources must not exceed $2,094 per month (as of January 1, 2012).  One dollar over this cap could result in adenial of eligibility.  For example, ifthe applicant meets all other requirements but receives $1,500 a month from teachersretirement and $800 a month from an oil and gas royalty check, the applicantwill be denied eligibility because her income is $206 over the cap.  

Fortunatelyfor people whose income is the only thing disqualifying them for Medicaid,there is the “Miller Trust,” also referred to as a Qualified Income Trust orQIT.  It helps solve the problem ofexcess income by sheltering it from Medicaid eligibility requirements, a legalmethod created by our court system and later by Congress. 

Oncea Miller Trust is established, monthly income from all sources must bedeposited into the trust.  The trusteemakes certain authorized distributions from the trust, such as a personal needsallowance of $60, applied income paid to the nursing home, allowance to thecommunity spouse if applicable, insurance co-payments, personal care items andexpenses not covered by Medicaid.

Althoughit helps overcome the income hurdle and attain Medicaid eligibility, establishingand managing the Miller Trust can be complicated.  It is important to have the trust drafted byan experienced elder law attorney who can advise how to set up the trust andmanage it properly.  This will ensure thatthe applicant will not lose eligibility because of a simple error made by thetrustee.

Theaverage cost of long-term care is over $5,000 a month for 24-hour care.  A majority of nursing home residents receiveMedicaid benefits because they exhausted their own assets on their care.  An elder law attorney can help you wadethrough the intricacies of Medicaid requirements, including establishing aMiller Trust, and obtain eligibility for your loved one at the earliestpossible date and preserve their hard-earned life savings.