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May 10, 2024

Understanding Miller Trusts: A Key to Navigating Indiana Medicaid

Written By: Eric Thomas
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As the population ages, more individuals and families are faced with the challenge of covering the high costs of long-term care. Medicaid is a vital resource for many in Indiana, providing necessary assistance to cover these expenses. However, the eligibility criteria for Medicaid can be stringent, particularly concerning income levels. For individuals whose income exceeds the Medicaid limit, a Miller Trust (also known as a Qualified Income Trust) can be an essential tool to qualify for benefits. This article explores the concept of Miller Trusts and how they can be used effectively within the Indiana Medicaid system.

What is a Miller Trust?

A Miller Trust is a legal arrangement that allows individuals to qualify for Medicaid even if their income exceeds the state’s eligibility threshold. Named after the case Miller v. Ibarra, these trusts are designed specifically to handle excess income and are irrevocable, meaning once they are established, they cannot be altered or terminated at will.

Why Miller Trusts are Necessary in Indiana

In Indiana, like many states, Medicaid has strict income limits for eligibility. As of 2024, the income limit for a single applicant is $2,742 per month. For those whose income surpasses this amount but who still cannot afford the cost of long-term care, Miller Trusts provide a way to channel excess income while still qualifying for Medicaid.

How to Establish a Miller Trust in Indiana

Setting Up the Trust

The process begins with drafting the trust document. This document must meet specific criteria set forth by the Indiana Family and Social Services Administration (FSSA). Key elements include:
- The trust must be irrevocable.
- It must be established by the Medicaid applicant, their spouse, or a legal representative.
- The trust must state that the Indiana Medicaid agency will receive any remaining funds upon the death of the beneficiary, up to the amount of Medicaid benefits paid on behalf of the individual.

Funding the Trust

Once the trust document is properly executed, the next step is to open a bank account in the name of the trust. The Medicaid applicant’s income that exceeds the Medicaid eligibility limit must be deposited into this account. It’s important to note that only income, not assets, can be funneled through the Miller Trust.

Administering the Trust

The funds in the Miller Trust can only be used for specific purposes:
- Medical expenses not covered by Medicaid.
- Personal needs allowance for the Medicaid beneficiary.
- Health insurance premiums.

Any funds remaining in the trust at the end of the month will be applied to the cost of the beneficiary’s care.

Benefits of Using a Miller Trust

The primary benefit of a Miller Trust is that it enables individuals to qualify for Medicaid despite having an income that exceeds the eligibility limit. This can be crucial for accessing long-term care services that would otherwise be unaffordable.

Moreover, by qualifying for Medicaid through a Miller Trust, individuals can preserve their assets for their spouses or other heirs, as Medicaid has strict asset limits that the trust does not impact.

Potential Pitfalls and Considerations

While Miller Trusts can be highly beneficial, they are not without potential complications:
-Strict Compliance: The trust must be managed strictly according to the rules. Any deviation can disqualify the beneficiary from Medicaid.
-Irrevocability: Once established, the trust cannot be changed or revoked, which requires careful planning and consideration.
-Residue Recovery: Upon the death of the beneficiary, any remaining funds in the trust are claimed by the state to recoup Medicaid expenses, which can impact inheritance planning.


Navigating the complexities of Medicaid eligibility in Indiana can be daunting, but Miller Trusts offer a viable solution for those with excess income. By understanding the setup, funding, and administration of a Miller Trust, individuals can secure the long-term care they need without exhausting their resources. Consulting with a legal expert specializing in elder law is highly recommended to ensure the trust is established and managed correctly, providing peace of mind and financial security for beneficiaries and their families.

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