New Jersey has recently announced that it will effectively eliminate the cap on income for seniors applying for Medicaid to cover their nursing home care. Soon, if you or your spouse need long-term medical care but your income exceeds the Medicaid income cap, you will be able create a Miller Trust or Income Qualifying Trust to hold the excess income so it doesn’t exclude you from eligibility for benefits. As the beneficiary of the Trust, you will then be able to use Trust assets to pay for medical costs or other specific types of needs, including, nursing home copayments and personal items. Your spouse will also be able to receive a monthly income from the Miller Trust. When you die, any funds left in the trust are paid to Medicaid.
Federal law does not allow a state to use Miller Trusts if it has a Medically Needy program in place to provide for nursing home care, a requirement that has kept New Jersey from being able to use this device. New Jersey has announced that it is eliminating its Medically Needy program, so those who need to qualify for Medicaid benefits will now be able to use Miller Trusts to hold whatever income they have in excess of the qualifying guidelines for Medicaid.
At present, because of this major change in New Jersey law, the way Medicaid is being handled is in a state of flux, which has created confusion and uncertainty for many elderly and disabled patients. If the creation of the Miller Trust is not handled properly, you could potentially lose assets unnecessarily. As with all estate planning services, the creation of Trusts to protect your hard earned assets in your later years and after your death should be handled by an experienced estates and trusts attorney who will know how to structure your asset-sparing Trusts in such a way that your heirs will be able to enjoy the bequests you’ve made to them.
In addition to Miller Trusts, there are other methods available to reduce your assets and income to meet Medicaid requirements, but you need to plan as far in advance of need as you can. Medicaid looks at all transfers of assets in the 60 month period prior to your application and may include those when computing your eligibility. Planning in advance for the possibility of needing this expensive end-of-life care can preserve your assets for those you love.
KingBarnes will examine your estate as a whole and recommend the best strategies to provide for your care when you need it without unnecessarily diminishing the assets you’ve accumulated throughout your lifetime. Call us today.
