Qualified Income Trusts (Miller Trusts)
Thinking about one’s later years may be difficult, especially if chronic health issues make it likely that nursing home care will be a possibility. Nursing homes are expensive, and paying for long-term care is often a major drain on one’s savings and other assets. Insurance can help fill the gap for some people, but many seniors will need the assistance of Medicaid or TennCare in order to help pay for nursing home expenses and other health care needs. Knowledgeable Nashville estate planning attorney Randy Ratliff can help you explore your legal options, including trust documents such as a qualified income trust (or “Miller trust”), as you make plans for your future needs.
The simple fact is that not everyone who needs long-term care qualifies for government assistance. A common problem is being “too poor” to pay for care on one’s own but “too rich” to qualify for help from the government. This is because eligibility for programs like Medicaid and TennCare is based largely on the financial position of the applicant. Tennessee is considered an “income cap” state, meaning that a person who needs nursing home care will not qualify for Medicaid or TennCare assistance if their income exceeds a certain amount (about $2,200 currently) unless they arrange to have their excess income paid into a trust. Such a trust is commonly known as a “qualified income trust,” a “supplemental needs trust,” or a “Miller trust.” (The name “Miller trust” comes from a federal court case arising in Colorado entitled Miller v. Ibarra; the rules regarding this type of trust are also codified at 42 U.S.C. § 1396p(d)(4)(B).)Setting up a Qualified Income Trust in Anticipation of Nursing Home Care
There are several rules that apply to Miller trusts. First, such a trust must be irrevocable; in other words, the trustor cannot change their mind and undo the trust. Second, the trust must provide that, upon the trustor’s death, the assets of the trust are payable to the state’s Medicaid (TennCare in Tennessee) program up to the amount that the agency has expended on the trustor’s behalf. Thirdly, only income is to be placed in the trust; other assets (such as the deed to a house or the title to a vehicle) may not be included in a Miller trust.
A knowledgeable estate planning attorney can help you learn more about qualified income trusts and other tools that might increase the chance that you will be eligible for Medicaid or TennCare assistance in the future. A thorough estate plan will also take into consideration matters such as a last will and testament or a trust to pass other assets to one’s heirs, as well as health care directives and powers of attorney for health care and financial matters. People who own a small business may have additional concerns, such as keeping the business in the family for the next generation or making appropriate arrangements for non-family business partners or investors. While everyone can benefit from quality legal guidance with regard to planning for the future, the more complex a particular family or individual’s situation, the more imperative it is that legal guidance be sought sooner rather than later. While such discussions and decisions may be awkward at times, such matters are best handled on the “front end” in the privacy of an attorney’s office rather than in a public court battle later.Seek Guidance from an Estate Planning Lawyer in the Nashville Area
At the Randy Ratliff Law Offices, PLLC, we handle a wide range of estate planning needs, including not only qualified income trusts but also other types of trusts (both revocable and irrevocable), as well as elder law and family law matters. To schedule an appointment with Attorney Randy Ratliff in our conveniently located Brentwood offices, call us at 615-656-8282 or contact us online. We serve clients throughout Davidson and Williamson Counties, including people in the cities of Nashville, Brentwood, Franklin, Cool Springs, Antioch, Madison, Goodlettsville, Joelton, and Hermitage. The sooner that you speak to a knowledgeable Medicaid planning attorney about your family’s future, the sooner that you can rest assured, knowing that you have done all that you can to make your hard-earned assets pass on to your loved ones in the most efficient manner possible under your particular circumstances.