Sample Miller Trust

Do NOT Use Or Copy This Trust

This article may be used for basic information and educational purposes.  This is not intended to apply to specific circumstances and is for "general knowledge only".  Reading of this article is subject to the blanket and general disclaimers attached hereto -

This must not be implemented without the advice of a competent CPA, and Attorney licensed in your jurisdiction, licensed in the situs of the trust, the domicile of the settlor, and other jurisdictions which might apply.

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Read The Introduction To Miller Trusts - Also Called Qualified Income Trusts

Local rules differ - in some areas the amount funded into the Miller Trust might be required to be paid to the Nursing Home during the individual's lifetime.

TRUST DECLARATION OF (ELDER)

This declaration of trust is made this ____ day of ___________, 2---, by (Medicaid Recipient) (hereinafter referred to as the settlor), regarding the estate of (ELDER) (hereinafter referred to as the beneficiary).

The Trust Purpose

The beneficiary of this trust requires continuing medical and nursing supervision and is completely dependent upon others for (HIS,HER) personal care. Beneficiary also needs assistance to care for and manage (HIS,HER) financial situation.

The overriding purpose of this trust is to obtain the necessary care from whatever sources might be available for the beneficiary. To that end this trust is designed to restrict the countable income of the beneficiary so that the beneficiary will meet the income requirements for Medicaid eligibility in the State of Texas.

It is the intention of the settlor of this trust to create a trust that will comply with the provisions of 42 USC §1396p, (b) et seq as amended by The Omnibus Budget Reconciliation Act of 1993 (effective August 11, 1993). Specifically to comply with (d) (4) (B) which states in part:

(B) A trust established in a State for the benefit of an individual if:

1. The trust is composed only of pension, social security and other income to the individual (and accumulated income in the trust); and

2. The State will receive all amounts remaining in the trust on the death of the individual up to an amount equal to the total medical assistance paid on behalf of the individual under a State plan under this title.

It is further the intention of the settlor to make any income of the beneficiary that exceeds the "income cap" as established in the State of Texas an unavailable asset to the beneficiary such that the beneficiary's countable income as defined by the eligibility rules of the Texas Medicaid Program will at all times be less than the prevailing income cap.

ARTICLE I NAME OF TRUST

This trust shall be known as the (ELDER) INCOME TRUST.

ARTICLE II BENEFICIARY

(ELDER) and the Texas Department of Human Services shall be the sole beneficiaries of the trust. Beneficiary (ELDER) is a (WIDOW) born on (BIRTH MONTH, DAY, YEAR). (HE,SHE) presently resides at (STREET ADDRESS), in (CITY, STATE).

ARTICLE III IRREVOCABLE

This trust shall be irrevocable.

ARTICLE IV APPOINTMENT OF TRUSTEE

Settlor hereby appoints (TRUSTEE NAME) as the Independent Trustee of this trust. Trustee shall serve without bond or supervision of any court.

ARTICLE V TRUST ESTATE

Settlor hereby grants and assigns to the Trustee the monthly income of (ELDER) described in "Schedule A," attached hereto and incorporated herein by reference.  Notwithstanding the named items shown on "Schedule A" no other assets shall ever be included in this trust or added to this trust other than those items allowed under OBRA 1993. The Trustee acknowledges receipt, in trust, of said property. No property other than the beneficiary's monthly income shall be used to fund this trust. Such property is to be held, administered and distributed according to the terms of this instrument.

ARTICLE VI DISPOSITION OF INCOME AND PRINCIPAL

Section 1. Distribution of Principal and Income While (ELDER) Receives Medical Assistance.

1. Approved Payments from the trust. The purpose of this trust is to enable the beneficiary to qualify for Medicaid assistance. In the administration of the trust, trustee shall do all acts necessary to establish and maintain the beneficiary's eligibility for Medicaid assistance. The trustee is specifically authorized to make any disbursements of income or principal of the trust for whatever purposes are deemed in the trustee's discretion necessary to fulfill the purpose for which the trust is created. The trustee is specifically prohibited from making any disbursements that would disqualify the beneficiary from receiving benefits under the Medicaid program. The trustee shall observe the rules and regulations concerning monthly income eligibility standards currently in use by the Medicaid program administered by the State of Texas or any other state in which the beneficiary may reside, to determine eligibility for Medicaid benefits otherwise referred to as the "income cap". The powers granted in this paragraph to the trustee concerning disbursement of income or principal from the trust are considered to include the authority to make whatever disbursements or to withhold from disbursement any amounts necessary to allow the trust to qualify the beneficiary for Medicaid benefits under the rules and regulations currently promigated or to be promigated by the Health Care Financing Administration and the State of Texas Department of Human Services. The Trustee shall first disburse the monthly personal needs allowance to the beneficiary, then must pay minimum monthly maintenance needs allowance, and then from funds remaining, the cost of medical assistance provided to the beneficiary. The Trustee may make distributions for the payment of the beneficiary's medical expenses to the beneficiary's guardian, conservator, caretaker, attorney, or by direct payment of the medical expenses for the beneficiary. The Trustee is ordered to make all distributions from the trust by the last day of the month in which the funds are deposited in the trust.
2. Approved Deductions From Distributions. Deductions may be taken from the trust distribution to the same extent that deductions from the income of a nursing home resident who is not a trust beneficiary are allowed under the Texas medical assistance program.

Section 2. Distribution of Principal and Income if (ELDER) Ceases to Receive Medicaid.

In the event that (ELDER) ceases to receive benefits under the medical assistance program, the entire income and corpus of the trust may be utilized by the Trustee for expenses relating to the care of (ELDER) including but not limited to nursing home care, medical care, health, maintenance and welfare. Any distributions under this section shall be at the sole discretion of the Trustee.

ARTICLE VII TERMINATION OF TRUST

Section 1. Events of Termination.

This Trust shall terminate upon the beneficiary's death.

Section 2.

Distribution Upon Termination.

 a. Distribution Upon Termination Due to Death While (ELDER) Receives Medical Assistance. When termination of the trust occurs because (ELDER) dies while receiving benefits under the Texas Medical Assistance Program, the Trustee shall then distribute and deliver any remaining corpus or rights to property in trust belonging solely to beneficiary up to an amount equal to the total medical assistance paid on behalf of the individual by the Texas Medical Assistance Program to the Texas Department of Human Services or its successor agency as reimbursement to the Texas Medicaid program for the Medicaid benefits and other Medicaid assistance provided to the beneficiary during (HIS,HER) lifetime. All trust property remaining thereafter shall be distributed to the named beneficiaries of the last will and testament of (ELDER) or (HIS,HER) heirs at law.

b. Distribution Upon Termination Due to Death After Cessation of Medical Assistance. In the event that (ELDER) no longer receives benefits under the Texas Medical Assistance Program, the Trustee shall distribute to the Texas Department of Human Services or its successor agency at the time of the beneficiary's death an amount equal to the total medical assistance paid on behalf of the individual by the Texas Medical Assistance Program to the Texas Department of Human Services as reimbursement to the Texas Medicaid Program for benefits provided by the Texas Medical Assistance Program to (HIM,HER) during (HIS,HER) lifetime. All trust property thereafter received by the Trustee, which is not distributed during the lifetime of (ELDER) pursuant to the preceding Article VI Sec. 2 shall be distributed upon the death of (ELDER) to the named beneficiaries of the last will and testament of (ELDER) or (HIS,HER) heirs at law.

ARTICLE VIII TRUST ADMINISTRATIVE AND PROTECTIVE PROVISIONS

Section 1. Jurisdiction.

This trust shall be administered expeditiously and consistently with its terms, free of any judicial intervention and without order, approval or other action by a court, subject only to the jurisdiction of a court which is invoked by the trustee or other interested parties or as otherwise provided by law.

Section 2. Modification or Termination by Court During the Lifetime of the Primary Beneficiary.

This trust may be subject to modification or termination by a Texas court. If the laws governing the benefit programs that this trust seeks to qualify the beneficiary for change such that the intentions of the settler were no longer obtainable under the terms of this trust as created, then the Trustee, beneficiary or any interested person is authorized to seek modification or termination of the trust so that the purposes of the settlor would be realized. The Trustee is specifically authorized to amend the trust at his discretion without resorting to any involvement of a court if such an amendment is necessary to cause the trust to comply with a policy, rule or regulation of the benefits program for which the beneficiary seeks qualification.

Section 3. Trust Property Not Subject to Probate.

Any property payable to this trust or contained in this trust shall not be subject to claims against the estate of the beneficiary following death, nor shall such benefits be subject to the control of the personal representative of the beneficiary nor be included in the property administered as part of the probate estate of the beneficiary. Upon the death of the beneficiary the property contained in the trust shall pass as set forth herein and under no circumstances shall the property in this trust be considered to be part of the probate estate of the beneficiary.

Section 4. Inalienability.

No beneficiary shall have any right to anticipate, sell, assign, mortgage, pledge or otherwise dispose of or encumber all or any part of the trust estate nor shall any part of the trust estate including income, be liable for the debts or obligations, including alimony, of any beneficiary or be subject to attachment, garnishment, execution, creditor's bill or any other legal or equitable process. The interests of the beneficiary of this trust shall be held subject to a "spendthrift trust" as set forth in Texas Property Code Section 112.035. This provision shall not bar any remedy sought by either the state or county department of social services for the purpose of obtaining trust distributions in accordance with this trust declaration and applicable federal and state laws and administrative regulations.

Section 5. Reports.

Periodic reports shall not be made unless required by the regulations of the Texas Department of Human Resources. The trust records shall be open at all reasonable times to inspection by the beneficiary of the trust, the Texas Department of Human Services which approved the beneficiary's assistance case, and their properly appointed representatives.

ARTICLE IX POWERS OF TRUSTEE

Section 1. Property Code Title 9 Trusts Provisions.

The Trustee may perform every act reasonably necessary to administer the trust. In addition to all of those powers specifically granted in this Article, the Trustee may exercise those powers set forth in the Texas Property Code Title 9 Trusts Secs. 101.001 through Sec. 115.017, together with any amendments to such Code subsequent hereto, and said Code as it exists at the date of the execution of this trust is incorporated herein by reference and made a part hereof as fully as if it were set out at length herein.

ARTICLE X TRUSTEE SUCCESSION AND ADMINISTRATIVE PROVISIONS

Section 1. Resignation or Death of the Trustee.

Any Trustee may resign by giving thirty days written notice to the beneficiary, or to the guardian, conservator or other legal representative of the beneficiary. Such resignation shall be effective 30 days from the date notice is given. In the event the Trustee resigns or dies while holding office, (ALT.TRUSTEE) shall serve as successor Trustee. If (ALT.TRUSTEE) resigns, or dies while holding office, any interested person may apply to be appointed successor trustee as set forth in Texas Property Code sec. 113.083.

Section 2. Representative of Beneficiary. The conservator of a beneficiary under legal disability or, if none, the guardian of such person or, if none, the person having the right of custody of a minor beneficiary, may act for such beneficiary for all purposes under the administrative provisions of this trust.

Section 3. Rights of Successors.

Every successor Trustee shall have all the title, rights, powers, privileges and duties conferred on or imposed upon the original Trustee, without any conveyance or transfer. No successor Trustee shall be responsible for any act or omission to act on the part of any previous Trustee.

Section 4. No Bond.

No Trustee, or any successor, shall be required to give any bond in any jurisdiction, and if, notwithstanding this direction, any bond is required by any law, statute or rule of court, no sureties shall be required.

ARTICLE XI DEFINITIONS

Except as otherwise provided, definitions of terms in this trust shall be in accordance with the Texas Trust Code, as amended.  Any reference in this trust to the Texas Department of Human Services, the county department of social services, or the Texas Medical Assistance Program, shall include any successor public agency or program which becomes vested with the responsibility for providing publicly supported benefits to eligible Texas residents.

ARTICLE XII CONSTRUCTION

Section 1. Conformity with Statutes.

In case of ambiguity or conflict, this trust should be construed in such a manner and shall be deemed to comply with the provisions of The Texas Property Code Title 9 Trusts, as amended.

Section 2. Applicable Law.

The validity of this trust shall be determined by reference to the laws of Texas. Questions of construction and administration of this trust shall be determined by reference to the laws of Texas.

Section 3. Headings of Articles and Sections.

The headings of articles and sections are included solely for convenience of reference, and shall have no significance in the interpretation of this agreement.

Section 4. Construction of Number and Gender.

Unless the context requires otherwise, words denoting the singular may be construed as denoting the plural, and words of the plural may be construed as denoting the singular, and words of one gender may be construed as denoting such other gender as is appropriate.

Signed by (Medicaid Recipient) settlor herein, and by (TRUSTEE NAME), who by (T-HIS,HER) signature below accepts the office of Trustee on the date indicated on page 1.

___________________________________

(Medicaid Recipient), SETTLOR

___________________________________

TRUSTEE OF THE (ELDER) TRUST

EXHIBIT "A" PROPERTY OF THE (ELDER) TRUST

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