Can You Pay Bills With a Miller Trust?

If your parent or spouse’s gross monthly income is more than the current Medicaid income limit of $2,163 then they need a properly created and administered Miller Trust (also know as a Qualified Income Trust or QIT) in order to have the HHSC disregard their over the limit income. So once they have the required Miller Trust are the funds in the Miller Trust available to pay expenses such as household bills?

Maybe, but rarely.

For an un-married nursing home Medicaid applicant the law requires that their income is applied towards the cost of their care. The only deductions from their income before the rest of it has to be paid to the nursing home are: 1) personal needs allowance; 2) guardianship fees; 3) dependent allowance; and 4) incurred medical expenses. Expenses like mortgage payments, rent, taxes, life insurance premiums, utilities, and other expenses that are not medical cannot be paid from the Miller Trust or the Medicaid applicant’s income unless their income exceeds their nursing home co-payment.

For a married Medicaid applicant the situation is a little different. The deductions that a married Medicaid applicant can take from their income before paying the rest to nursing home are: 1) personal needs allowance; 2) guardianship fees; 3) diversion to meet community spouse’s MMNA; 4) dependent allowance; and 5) incurred medical expenses. So as a result, if the healthy spouse at home’s income is eligible to be increased by diverting all or a portion of the Medicaid applicant’s income then the Miller Trust will pay a specific amount to the healthy spouse each month which can then be used to pay those household bills, but the income should be transferred from the Miller Trust to the spouse first in order to avoid any confusion.

If a married Medicaid applicant’s spouse is not eligible for a diversion of income, then the Miller Trust will not make a payment to the spouse each month and the funds in the trust will be used toward the applicants medical expenses.

In order to establish and maintain nursing home Medicaid eligibility on a monthly basis it is critical that the Medicaid applicant’s income is administered and paid in compliance with Medicaid eligibility regulations. If you do not follow the regulations, you jeopardize Medicaid eligibility for your parent or spouse. Speak with a Woodlands Medicaid Attorney today if you need assistance to obtain nursing home Medicaid for your parent or spouse.

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  1. what, if any, legal fees are deductible as medical expenses (for IRS purposes) incurred in connection with assisting a family in navigating the Medicaid application and for medical directives, trust, annuity hoops and related fees in Texas?

  2. In almost all cases I work on the legal fees are paid from the Medicaid applicant’s funds because they are over the Medicaid resource limit when we begin.

    As for income tax deductions, I will defer to your income tax preparer on which deductions they feel comfortable defending in front of the IRS.

  3. Hello Mr. Shea, we have already gotten a Miller trust for my mother-in-law. She is in the nursing home for skilled nursing and will go to private pay on April 3 going forward. Her 100 days of Medicare will be up on April 2.
    Her Medicaid application has been sent in and we are waiting to hear if she will be approved. In the meantime, is it permissible for us to pay for doctor office visits out of the Miller trust? No one I have asked seems to know much about qualified income trust. We got one because she is over the Medicaid income limit.

  4. I don’t have all the necessary information but this is probably going to come down to her Medicaid eligibility start date. If her Medicaid start date is April 1 then it should be a non issue because Medicaid would pay the vendor directly or deduct it from her co-payment if the doctor is not in the Medicaid program. If her Medicaid start date is after April 1, then until she come up to her Medicaid start date it is possible to pay medical bills. All that being said, it appears there is someone else that is representing you on the application and the Miller Trust so you should consult with them. And if they can’t answer questions like these you may want to consider a better source of advice.

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