Qualified Income Trusts or Miller Trusts for Medicaid
According to the Georgia Attorney General’s Consumer Protection Division, the average cost of a semi-private nursing home room in Georgia was more than $7,000 per month in 2021, and that cost has only risen in recent years and will continue to rise. For one year of care, that totals more than $84,000. In order to protect assets and avoid having to “spend down” in order to qualify for Medicaid, many Gwinnett County residents will set up a type of trust that can protect their savings and other assets while allowing them to qualify for Medicaid.
A Qualified Income Trust (QIT), also known as a Miller Trust, is one way to do this.
Understanding Medicaid Eligibility and “Spending Down”
Since nursing home care costs so much, most older adults in Norcross and throughout Gwinnett County do not want to have to pay all of those expenses out of the assets they have accumulated over a lifetime of working. To be sure, two years or more in a nursing home may result in a complete loss of all of an older adult’s savings and assets. Instead, they will want to become eligible to have Medicaid cover the costs. While you might know of Medicaid as a public program for people with limited assets and income, it is the way that most older adults cover the costs of long-term care — even if they were firmly middle-class earners or in an even higher income bracket during their working years.
However, in order to qualify for Medicaid and to have Medicaid pay the high costs of long-term care, it is necessary to “spend down” to an amount that makes you a person with limited assets. You cannot simply gift assets to your adult children or other loved ones because Medicaid has a “lookback” period in which it can penalize you for any gifts made during the five years before you needed long-term care.
Setting Up a QIT or Miller Trust
There are ways you can technically “spend down” without actually spending all of your money while becoming eligible for Medicaid. You may be able to do this by setting up a QIT. By setting up this type of trust, you can put income and certain assets into the trust in order to remove those assets from the Medicaid eligibility determination process, according to Georgia Medicaid. In short, a QIT or Miller trust allows you to shelter or protect some of your assets without having to “spend down” in order to qualify for Medicaid.
Yet there are important requirements you must meet. Those include the following:
- Only your income can go into the QIT, which can include your pension, certain Social Security benefits, VA benefits, and similar;
- Trust must be irrevocable;
- You cannot add resources from existing accounts (only incoming income can go into the trust);
- You cannot place non-liquid resources into the trust or convert non-liquid resources into liquid resources in order to place them in the trust;
- Trust cannot be backdated;
- Trust must be established in Georgia to qualify for Georgia Medicaid; and
- Remainder of the trust must go to the Georgia Department of Community Health (DCH), up to the amount paid for your long-term care.
Contact a Gwinnett County Estate Planning Lawyer
To find out more about setting up a QIT and other aspects of Medicaid planning, you should get in touch with an experienced Gwinnett County estate planning attorney at Bowman Law Firm. Contact us today for more information.
Sources:
pamms.dhs.ga.gov/dfcs/medicaid/2407/
consumer.georgia.gov/long-term-care
aspe.hhs.gov/reports/what-lifetime-risk-needing-receiving-long-term-services-supports-0
