Note:  See our Miller Trust page for more current information on Miller trusts / Qualified Income Trusts (QIT’s).

Miller trusts are coming to New Jersey. We’ve covered the basics in previous posts, and now I want to cover some current issues with Miller trusts and Medicaid that consumers and practitioners should be aware of. Here’s what you need to know:

Miller trusts won’t be up and running on November 1, but will hopefully be up by the end of 2014. The Centers for Medicare and Medicaid Services (CMS) has yet to approve New Jersey’s Medicaid State Plan Amendment.

When Miller Trusts start, Medically Needy will end. The Medically Needy program will cease to take new applicants, and people with high income will instead apply using Miller trusts. However, folks who currently receive assistance under Medically Needy will be grandfathered in, and won’t have to switch to Miller trusts.

Miller trusts can be used in a nursing home, assisted living facility or for home care. Since Medically Needy only covers care in a nursing home, this creates new options for seniors and disabled people with higher income.

It’s not clear yet whether Miller trusts can be used to obtain DDD services. New Jersey’s Division of Developmental Disabilities (DDD) has said that people who seek group home care and other expensive services must obtain Medicaid through the Community Care Waiver. It’s not clear yet whether Miller trusts can be used to do that for people with higher incomes. Medicaid officials have said no, DDD officials have said yes. My suspicion is yes, but stay tuned.

NJ Miller trusts limit how beneficiaries can use income. NJ miller trusts allow trust funds to be used to pay the beneficiary’s personal needs allowance, spousal allowance, and medical costs. This is more limited than other states. Arizona, for example, allows broad medical expenses, special needs allowances and guardian and trustee fees. New Jersey is much more limited, for now.

It is unclear who will serve as trustee for beneficiaries without family support. A Miller trust requires a trustee to manage the trust and distribute income. In most cases, beneficiaries will rely on their spouse or children to serve in this role. But for people who don’t have family support, it’s not clear who would serve as trustee. Nursing homes have an inherent conflict of interest, it’s outside the statutory mandate of New Jersey’s Office of Public Guardian and most non-profits don’t want the job. New Jersey does allow a very modest trustee fee, and my guess is that private businesses will rise up to fill this role.

DMAHS now has a Miller trust website. The website includes FAQ’s and a trust template. However, a word of caution: Don’t try this at home. Medicaid laws are exceedingly complex, and if you try to do Medicaid planning without understanding the rules you could end up being disqualified from Medicaid for a long time or losing a big chunk of your assets. For something this important, it’s worth working with an expert.

We will post more information on Miller trusts as it becomes available. Stay tuned, or call or email us today for specific information on your situation.