What Is A Qualified Income Trust?

Qualified Income Trusts Explained

As a resident of Ohio, you may have heard of a qualified income trust, also known as a Miller Trust. This category of trust is often used by those who wish to qualify for Medicaid coverage of nursing home expenses. To qualify for Medicaid, an individual’s monthly income must be below a certain level.

However, in some cases, even when a person doesn’t fall under this threshold, they may still qualify for Medicaid coverage if they establish a qualified income trust.

A qualified income trust is a changeless trust established for the benefit of an individual who requires medical care. The trustee is responsible for paying the individual’s monthly bills from the trust. Any remaining funds in the trust after the individual’s death must repay Medicaid for expenses paid on the individual’s behalf.

Here are several things to know if you consider establishing a qualified income trust.

• First, once established, you cannot change the trust. So, should your circumstances or the law change, you will be stuck with the same trust.
• Second, if you have a spouse, they must also agree to establish this trust. For some, this could present issues such as one spouse feeling insecure, left out of the process, or as if they aren’t getting a fair deal.
• Third, consider whether a qualified income trust is the best option. There may be other ways to qualify for Medicaid coverage of nursing home expenses.

How Does A Miller Trust Work in Ohio?

For Ohioans researching options for qualifying for Medicaid to cover nursing home care costs, a Miller Trust is a possible solution.

As mentioned above, this is an irrevocable trust, which is unchangeable once established. It’s important to know that a Miller Trust only applies to individuals – not couples.

So, if you and your spouse are hoping to qualify for Medicaid using a Miller Trust in Ohio, you will need to establish an individual trust. And your spouse will also need to establish their trust separately. Let’s have a more in-depth review of how Miller Trust works in Ohio.

The first thing you’ll need to do is find someone to act as the trustee. This person will manage the trust and ensure the funds get used for your care. Once a trustee gets designated, the trust needs funding. Funding is possible by transferring assets in your name into the trust. For example, you may sell your home or other assets and use the proceeds to fund the trust. It’s also possible to fund the trust with income. So, if you receive Social Security benefits or have other income payments, you can use this to help fund the trust.

The final piece of the puzzle is designating how the trust funds will get used. The trustee will use the funds to pay for your care and other expenses.

It’s worth noting that the trustee can only use the trust funds for your benefit. So, if any funds remain after passing away, the trustee must use them to repay Medicaid for any expenses paid on your behalf.

Does A Qualified Income Trust Impact An Estate?

One common question about Qualified Income Trusts is whether or not they impact an estate. The impact a Qualified Income Trust has can vary from state to state. For example, a Miller Trust does not affect an estate in Ohio.

When the individual passes away, the trustee can use any leftover trust funds to repay Medicaid. But, anything that’s left after repaying Medicaid would then go to the estate. It’s worth mentioning that you can use a Qualified Income Trust in conjunction with a Life Estate. So, if you have a home that you’d like to keep in the family, you can establish a Life Estate.

This arrangement allows the ‘life tenant” to live in the home for the remainder of their life. And after passing away, the house would go to heirs, enabling people with this legal arrangement the ability to keep the home in the family.

Need Help With Probate Law In Ohio?

While a qualified income trust does offer a way to qualify for Medicaid coverage, it’s not the only option. And the process can be complex.

Speaking with a legal professional helps reduce stress and frustration. And it also offers peace of mind, knowing you have someone in your corner, fighting for your best interests.

If you have questions about a Qualified Income Trust or any other probate law matter in Ohio, we can help. To schedule a consultation, contact us today.