Miller Trusts: Helping Pay for Nursing Home Care

Many people worry about how they will pay for nursing home care if it becomes necessary.  The Iowa Department of Health and Human Services says that for 2022, nursing home care in Iowa averages over $8,000 per month. This is an amount many elderly Iowans cannot afford.

Medicaid will pay nursing home costs if a person's income and assets are below certain limits.

• In 2025, non-exempt assets must be $2,000 or less and income must be $2,901 or less per month. 
• Married couples should note that if one spouse lives outside of the nursing home, the spouse in the nursing home can qualify for Medicaid even if the couple has more than $2,000 in assets.
•  If you meet the asset limit but have income above $2,901 per month, you may still qualify for Medicaid if your monthly income is $10,653.75 per month or less. 
• To do so, you must set up a special kind of trust known as a "Miller Trust." 
• Miller Trusts are also called "Medical Assistance Income Trusts" in state and federal statutes or regulations.
• These trusts can resolve the problem facing people with too much income to get Medicaid assistance, but not enough to pay for nursing home care.
• Miller trusts can also be used to qualify for in-home assistance under the Medicaid Elderly Waiver program.

A Miller Trust can contain only certain funds. It is a trust that only includes income such as pension and Social Security income. 

• Savings or other resources cannot go into a Miller Trust. 
• The person who benefits from the trust is the "beneficiary." 
• For Miller Trusts, the beneficiary is the person in the nursing home. 
• The person who administers the trust and pays out money is the "trustee." 
• The trustee is usually the beneficiary’s spouse or other family member.  
• A Miller Trust limits a beneficiary’s income to an amount that qualifies for Medicaid.

For example, suppose Mr. Jones has $1,000 in savings and needs to move to a nursing home.  His only income is Social Security and pension benefits totaling $3,000 each month. Without a Miller Trust, Mr. Jones’ income is over the $2,901 limit and he is not eligible for Medicaid. With a Miller Trust, however, he can be eligible. The first step is to set up the trust.  Once this is done, Mr. Jones’ Social Security and pension income, but no savings, will start going into the trust.  Mr. Jones will be the beneficiary.  A trustee will be named to handle the trust for Mr. Jones.  Once the paperwork is completed and a separate bank account is opened for the Miller Trust, Mr. Jones should be eligible for Medicaid to help pay his nursing home bills. The funds in the Miller Trust account must ordinarily be paid out as follows:

• $10 per month (more with a court order) may be paid to the trustee for trust expenses;
• $50 per month for Mr. Jones’ personal needs (possibly more if he is a qualifying veteran);
• If Mr. Jones has a spouse, some of his income can usually be paid to his spouse with the balance to the nursing home;
• If Mr. Jones does not have a spouse, the balance of $2,940 ($3,000 – 10 – 50 = $2,940) would be paid to the nursing home.

Upon Mr. Jones' death, any income left in the trust will go to the state, up to the amount spent by the state on his care.

It is very important to realize not all trusts qualify as Miller Trusts.  Trusts that do not meet the specific criteria of a Miller Trust could make a person ineligible for Medicaid.  Many rules apply to anyone entering a nursing home, including restrictions on transfers of assets.  Anyone thinking about setting up a Miller Trust or any other type of trust should contact the Legal Hotline for Older Iowans or a lawyer familiar with estate planning and Medicaid rules.

This information is from the Legal Hotline for Older Iowans 1-800-992-8161 The Hotline is a project of Iowa Legal Aid. The Hotline is a free, confidential service for all Iowans 60 or older with questions on non-criminal legal matters