All about Special/Supplemental Needs Trusts and Miller Trusts
Anyone with a disability or other special need, or who has someone in their family with a disability or special need, knows how expensive medical care and general cost-of-living expenses can be. Oftentimes these extra costs may not be covered by insurance. Combined with the inability of most people with a disability or special need to be able to support themselves or hold down a full-time job, it can often seem that you are stuck in a completely unfair system that is simply too cost prohibitive.
There is a legal method to help people with disabilities or special needs, or family members with disabilities or special needs, supplement their available income using a special needs trust or a supplemental needs trust. Someone with the disability or special needs can set up their own special needs trust, or supplement needs trust, using their own assets. Alternatively, third parties, such as family members, can also set up a special needs trust, or supplemental needs trust, using their assets to fund the trust for the benefit of a family member with a disability or special needs.
These trusts can be funded in such a way, and the trust agreement drafted in such a way, that the income stream available to the person with the disability or special needs will not have any government assistance programs they may be on affected by the income from the trust. These trusts are designed to provide additional financial support for personal and medical expenses that are not covered under otherwise applicable government assistance programs. You can also provide for the funding of a special needs trust for the benefit of a family member in your last will and testament.
It is absolutely essential that the trust be drafted correctly by an experienced estate planning attorney, as these trusts are irrevocable once they are established and cannot be revoked or amended.. Mackay Law Firm, PLLC has experience drafting and setting up special needs or supplemental trusts.
Miller Trusts are also an effective tool that can be used to qualify a person to become income-eligible for long term nursing home care covered by Medicaid. Due to Medicaid restrictions on income, it is very difficult for some individuals to qualify for long term Medicaid assistance because their income is simply too high to qualify. A properly drafted and funded Miller Trust can help someone fitting this description qualify for long term Medicaid assistance so that they may get into a nursing home and have their care covered by Medicaid.
To set up a Miller Trust, a bank account must be opened and the trust document drafted. The person setting up the trust (the “grantor”) can be the person looking to get on Medicaid, their power of attorney, or a legally appointed guardian. A trustee must be appointed to manage the trust, and this person must be someone other than the Medicaid applicant, usually a relative or adult child. The state is also named as a beneficiary of the trust. When the Medicaid applicant passes away, the applicable state Medicaid agency will receive all of the remaining trust funds up to the amount that agency paid for the individual’s health care. You can only use funds in a Miller Trust for very specific purposes. If all of the Medicaid recipient’s income is deposited into the trust, they can be paid a “Personal Needs Allowance” every month to help them cover their personal everyday needs. All of the rest of the income must go towards paying the cost of the Medicaid recipient’s long-term care, oftentimes towards the costs of a nursing home or other assisted living facility.
This trust is also irrevocable, meaning you cannot cancel it or change it in anyway once it is established, so you should have an experienced estate planning lawyer assist you with drafting one and setting it up the right way. Mackay Law Firm, PLLC has experience drafting and setting up Miller Trusts.
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