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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10156
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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How does a senior citizen qualify in Texas if their monthly

Customer Question

How does a senior citizen qualify for Medicaid in Texas if their monthly income exceeds the limit?
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
I need a lawyer that deals with elder care issues. I don't know how it got to this category. smile.
Expert:  Lane replied 1 year ago.

Hi,

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I can help you here. I hold CFP Designation, Juris doctorate (law degree) with and MBA in Finance & tax, but most imporatant is the fact that I have providing estate, retirement & medicaid planning for 30 years

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In Texas, this is done by using a "Miller Trust,"

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If the income of an applicant exceeds the limit allowed, you can only become eligible through the use of a Miller Trust (also called a QIT – Qualified Income Trust). When properly drafted, the trust documents allow the applicant to divert income into a specific type of bank account thereby becoming “income eligible.”

Expert:  Lane replied 1 year ago.

The very GENERAL overview is (1) draft the trust document, (2) establish a bank account to go along with the trust and (3) make the deposits

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A good deal of complexity exists, however. I've seen bad information from sources you would think reliable, such as nursing home staff, social workers, bankers, financial planners, relatives and friends. Even non-elder law attorneys are guilty. But if you contact a TX licensed Elder Law Attorney, this is squarely in their expertise and a pre-requisite for this type of practice.

Expert:  Lane replied 1 year ago.

OK, I still don't see you coming into the chat here, so I'll provide some general information;

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You may already know this but GENERALLY (before the application of the Miller Trust), there are 4 requirements for medicaid for nursing home care

  1. There must be a medical need
  2. They must be in a Medicaid bed
  3. Countable resources must be under $2,000,and
  4. Gross Income must be less than $2,199/ month

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Also important... the Miller Trust does NOT protect assets (I'm guessing from your questin you may already know that) but, Texas is what is known as an “income cap state." For 2015, when an individual’s income exceeds $2,199, a Miller Trust (also called a Qualified Income Trust) is necessary to qualify for benefits. And again, income is allowed to be placed in the trust. It doesn't protect assets

Expert:  Lane replied 1 year ago.

After the trust is set up and initially funded, Texas determines how much of the nursing home bill will be paid by the State and how much by the patient. Texas follows the federal government guidelines, and this is what can be deducted ...

  • A “Personal Needs Allowance” for the patient (currently $60 in Texas)
  • Premiums for health insurance including Medicare Part B, Medicare Part D (prescription drug plans), Medicare supplements and private health plans.
  • If a spouse lives “in the community” (meaning not in a nursing home), an amount to raise his or her available monthly income to the Spousal Income Protected Allowance of $2,980.50.

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Then the balance is paid to the nursing home as the patient’s share of cost ... which Texas calls the “applied income amount." or sometimes the“co-pay.”

Expert:  Lane replied 1 year ago.

There are other important specifics around when to set up and how the trust must be funded, especially important is the fact that, from Medicaid’s perspective, if the trust receives the income, the patient is not receiving it. That’s how the problem of excess income is resolved. ... so until the income can be directed INTO the trust, (from the receiving bank) a best practice is to write checks for the exact amount of income from the receiving bank account to the Miller trust account.

Expert:  Lane replied 1 year ago.

Also, most banks will require a POA for someone other than the medicaid applicant to se up the account (SOME may waive) but if you cannot find a bank that will waive that requirement (again, a bank policy that varies from bank to bank) and the person is already incompetent to GIVE the POA, then you may have to petition the court for guardianship ... this is where some pre-legwork can really help, (get on the phone a start digging into which bank may work best for you)

Expert:  Lane replied 1 year ago.

Questions at this point?

Expert:  Lane replied 1 year ago.

OK, a little more ... Health and Human Svcs in TX is very open-ended (lenient) about WHO can open the trust ... The problem arises when the folks at the bank don't know how to correctly open the trust bank account.

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So again, really pinning down the banks about (1) Their experience with Miller Trusts (QIT – Qualified Income Trust) and (2) What they need to open the account if you are doing this FOR the applicant, is a critical piece.

Expert:  Lane replied 1 year ago.

By the way, Texas Medicaid policy allows you to set up a Miller Trust as late as the last day of the month in which eligibility is sought. For example, if you need eligibility in August, you have until August 31 to get the Trust document written, signed and the bank account open

Expert:  Lane replied 1 year ago.

I hope this helps

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Let me know if you have questions

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Lane

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If this HAS helped, and you don't have questions, I'd appreciate a positive rating (by clicking the stars or smiley faces on your screen) ... that's how we're credited for the work here)

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Expert:  Lane replied 1 year ago.

Hi,

….

I'm just checking back in to see how things are going.

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Did my answer help?

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Let me know…

….

Lane

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If this HAS helped, and you don't have questions, I'd appreciate a positive rating (by clicking the stars or smiley faces on your screen) ... that's how we're credited for the work here)

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