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So, if your income is above the limit for medicaid, you can set up a pooled income trust ( the money in the trust reverts to the state).
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The state of Texas has made available documents that discuss this topic that were updated in December 2016.
https://hhs.texas.gov/book/export/html/23451
Here is partial quote:
"MEPD, Appendix XXXVI, Qualified Income Trusts (QITs) and Medicaid for the Elderly and People with Disabilities (MEPD) Information
Revision 16-4; Effective December 1, 2016
The Texas Health and Human Services Commission (HHSC) offers this information to help prospective Medicaid applicants and their attorneys by describing basic information about the use of a qualifying income trust (QIT) (sometimes referred to as a "Miller" Trust) in meeting MEPD eligibility requirements. A model instrument is included at the end of this document to show an example of a QIT that meets MEPD requirements when properly completed. This form meets the basic MEPD requirements for a QIT; however, it is not the only acceptable QIT form, and it may have consequences beyond Medicaid eligibility that an applicant would want to consider....
HHSC staff has an obligation to inform applicants and others individuals of MEPD requirements. This information is not intended as legal advice and individuals seeking information on the legal consequences of these documents are encouraged to consult a lawyer of their choosing. HHSC will only review trust documents in connection with the processing of a Medicaid application. The review by HHSC is limited to a determination of whether the trust meets the requirements for a Medicaid QIT.
Individuals with low or limited income may be able to get legal counsel through their local Legal Aid office, local area agency on aging, local bar association, National Academy of Elder Law Attorneys, lawyer referral service, Advocacy Inc. or the State Bar of Texas."
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Do a search for a qualified income trust and put in the state where you live.
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It is a Qualified Income Trust, set up when the person on Medicaid has more funds than allowed, a pooled account is set up and reverts to the state.
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I try to explain it to a friend, and I kinda know - but I am so dumb. Can someone explain it in depth, slowly and clearly, as if to a small special needs child? So I don't have to flounder around?
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Lassie: Don't put yourself down like that. BarbBrooklyn and I explained it.
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Let's say that your parent is told that they get $10.00 too much per month in SS to qualify for Medicaid. An eldercare attorney can set up a Pooled Income Trust so that the amount of money that they receive that is over the amount that would qualify them for medicaid goes into a Trust each month. They are then qualified for Medicaid. The "overage" that is in the trust then reverts to the State when the parent dies.
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Lassie, I've found if you think of Miller as a math problem it's easier (lol)...

Auntie lives in the State of Utopia where the monthly maximum income allowed for NH Medicaid eligibility is $ 2,100.00. The $ 2,100 is a hard & fixed #.

Auntie gets $ 1,200 SS & $ 1,000 from her late hubs retirement & also gets $ 800 a mo from her teachers retirement. Aunties income is $ 3,000 a mo. This 3k is a variable # as SS & retirements can have a cost of living adjustment (COLA).

For Miller to work, All 3 income sources must be considered "qualified" (basically means it's guaranteed to be paid)

Math problem is: 3k - 2,100 = $ 900.00.
Auntie is $ 900 over Medicaid maximum for monthly income.

Auntie gets Miller done. All income now is owned by & paid to the "trust" but the trust has Auntie as the "beneficiary". Viola! Aunties qualifies. Happiness all around!

Miller trust is its own legal free-standing entity.
At this point, Miller seems to take different paths depending on state laws and Medicaid regulations. Like some states have a straightforward pooled trust, so all income gets paid to the facility. But Auntie gets a small monthly personal needs allowance & its placed into an account at the NH. In this path, when Auntie dies there no $ left.

Other states have it as a more traditional trust that pays the state income max is paid to the NH; Auntie still get her personal needs allowance; but the overage (like for Auntie it would be $ 900 each month) goes into a interest paying trust account which upon her death goes to the state as the state is the beneficiary. 

Family kinda need to make sure to that Auntie spends her personal needs allowance (varies by state from $ 35 - $115 a mo, for my mom in TX it was $60) so Auntie has a weekly appointment at the beauty shoppe at the NH & they buy her clothes & toiletries from her allowance regularly. 

Miller is not a DIY. Usually family need an elder law atty to set it up so all kumbaya for compliance in the State of Utopia. Remember SS can increase if a COLA's done so the trust has to be written so its flexible. Not a DIY. But some states are trying to make Miller simpler and part of the Medicaid process.
I think Miller is going to be in the future a routine part of medicaid LTC as a huge # of baby boomers will be paid closer to boomer average SS of $ 2,687 (& some getting the SS max of $ 3,538) so totally over all states current Medicaid income limit with just their SS alone. Even so, still can't cover NH cost of 8k-15k a mo. But can do a Miller and qualify for Medicaid.
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This is a common question for families who live in "income cap" states and are considering applying for Medicaid or having a difficult time meeting the eligibility requirements.

In addition to the excellent answers and explanations provided above, it may help to take a look at the article below on Miller trusts written by our Medicaid and elder law expert, Gabriel Heiser.

https://www.agingcare.com/articles/How-to-Use-a-Miller-Trust-for-Medicaid-Eligibility-207367.htm

Best of luck to you all!
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Thank you for your answers.
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I would definitely talk to a elder law attorney. I was under a series of beliefs from reading about medicaid, including the official medicaid site. Then I talked to a elder law attorney and he said there are so many things that can be done. He said he knew why I thought what I thought, but that many of those things have solutions without having to shed any assets. He also described how many trusts are the wrong type of trust in terms of medicaid planning.
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