What Are the Uses for a Miller Trust?

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A Miller Trust is a special type of trust that adjusts a personís income downward, usually in an attempt for the individual to retain eligibility for certain types of governmental benefit programs. Most often, these trusts are used for the purpose of establishing eligibility for the Medicaid program.

Medicaid Program Eligibility Criteria

In order to qualify for Medicaid, the individualís income must be under a specific income level. Medicaid is administered at the state level, so the state establishes the income level that the applicant cannot exceed. How eligibility is determined depends on whether the state is considered a spend-down state or an income cap state.

Spend-Down States

Most states are spend-down states in which an applicantís income must be spent down on medical costs before the applicant can become eligible for Medicaid. These states do not use Miller trusts because applicants qualify for Medicaid when their healthcare costs lower their income below the income standard used in the state.

Income Cap States

In income cap states, Medicaid applicants who have income that is over the income eligibility guideline cannot qualify for Medicaid unless they put excess income in a Miller trust. The state establishes the income cap. However, the maximum income is typically 300 percent of the monthly SSI amount.

Miller Trusts

The Miller trust pays the Medicaid recipient a small monthly allowance. By redirecting income to the Miller trust, the applicant can become eligible for the program. Redirecting income involves putting it into an account that is titled in the name of the trust, for example. The income that is part of this special type of trust is not counted when determining whether the applicant is eligible for Medicaid so that the applicant has the opportunity to be eligible for this program.

Spouseís Income

The Miller trust can also pay the recipientís spouse a small monthly allowance. However, any income over the amount necessary for the recipient and his or her spouseís allowance is then used to pay the recipientís share of his or her cost of care.

Mechanics of a Miller Trust

Miller trusts are primarily used to help applicants become eligible for Medicaid benefits. However, much of the funds that are originally deposited into a Miller trust account are often used to pay for the cost of the applicantís care. For example, if a Medicaid applicant receives income of $2,500 but the income cap is $2,205, the applicant would not qualify for benefits because her income is $295 more than the state income eligibility guideline. However, if a Miller trust is established, the extra $295 could be deposited into a separate account for the Miller trust even though most of the $2,500 will be used to pay the applicantís share of her cost of care. Usually, the applicantís entire government benefit check is deposited into an account that is listed under the name of the trust. By depositing the funds in this way, it prevents the applicant from having direct access to the income so that the funds can be split between the site providing care for the applicant and the applicantís monthly allowance.


Miller trusts can be used to pay for a small monthly allowance, Medicare premiums and medical expenses that are not covered by Medicaid or Medicare. In any event, the Miller trust can only be used to pay for the applicantís allowable expenses.
At the time of the applicantís death, the state can recover expenses that Medicaid covered during the applicantís life. If there are any remaining funds after the state takes its allowed portion, these funds can go to the beneficiaries that are named in the trust.

Establishing a Miller Trust

Unlike other types of trusts, there are limited restrictions on who can establish this type of trust to qualify for government benefits. Any applicant of any age who would otherwise be eligible for the Medicaid program can establish a trust of this nature. Often, a person uses the services of an estate planning lawyer to devise a trust of this nature. In the trust document, a trustee is named to administer the trust for the benefit of the applicant.

The account is opened with only the funds necessary to establish an account at the financial institution. Additional assets cannot be deposited into the trust. Funds that are excluded per federal or state law also should not be deposited to the account. Due to the complex nature of these trusts, estate planning lawyers are often used to establish trusts of this nature.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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