Article: Texas Miller Trust, Income Trust, Special Needs Trust and Pool Trust

Qualified Income Trust (Miller Trust), Special Needs Trust and
Pool Trust...Understanding the Differences

Trusts

Property in a trust may or may not be countable, depending on the terms of the trust and the source of the money. The following are the three types of exempt trusts allowed under Medicaid rules. In most cases, you will need to consult an attorney about setting up a trust. In all cases, the state must be named as a residuary beneficiary of the trust.

You will need an attorney to set up a Qualified Income Trust, commonly called a Miller Trust. Only income, not property, may be placed in this trust. In addition, income must be placed in the trust in the month it was received and it must be spent no later than the month following receipt. While not all your income must be placed in the trust, all the income from a particular source must be. For example, if you receive a pension and Social Security benefits, you could choose to place only your pension in the trust, but you must put in the whole amount. Income in a Miller Trust does not count toward the income cap in determining eligibility. However, it is considered in determining your co-payment for services.

Texas is considered an “income cap” state when determining eligibility for Medicaid nursing home benefits. That cap is presently $1,869 per month (effective 1/1/07) but the average cost of a private pay nursing home is $3,549 per month (effective 9/1/05). In recognition of these hardship situations, Congress adopted as part of the OBRA ‘93 budget bill a revision to 42 USC Section 139p to allow an income diversion trust which permits a client caught in the income gap to legally divert income into the trust. The QIT addresses income only. All other eligibility requirements of the Medicaid program, such as citizenship, residency, and medical necessity must still be met to establish Medicaid eligibility.

A special needs trust can be established by a parent, grandparent, legal guardian, or the court using the client's assets. You will need to consult an attorney to set up this type of trust. To qualify as exempt, the trust must benefit someone under age 65 who meets SSI disability criteria. Normally, this type of trust is used in the settlement of personal injury or malpractice tort litigation. Property in this trust is not counted as a resource. Distributions made for medical or social services not included in the state Medicaid program will not be counted as income. Distributions for food, clothing, shelter, or cash will be counted as income to the client.

A pool trust is a collection of small special-needs trusts that are centrally managed. The only pool trust approved in Texas is through the ARC of Texas. DADS has approved this pool trust. It is exempt only for persons under age 65. For more information, contact the ARC of Texas, 1600 W. 38th St., Suite 200, Austin, TX 78731, 1-800-252-9729.

SOURCE: Texas Department of Aging and Disability Services

Disclaimer: Elder Options of Texas is not rendering any legal or professional advice. If legal advice is necessary the reader should consult a competent attorney.

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