Qualified Income Trusts (Miller Trusts) in Nevada: Solving the Medicaid Income Limit Problem

Nevada is an 'income cap' state when it comes to Medicaid long-term care. This means that if an applicant's monthly income is even one dollar over the state's strict limit (generally set at 300% of the federal Supplemental Security Income rate), they are instantly disqualified from receiving help paying for nursing home care. Fortunately, federal law under 42 U.S.C. § 1396p(d)(4)(B) provides a solution: the Qualified Income Trust, commonly known as a Miller Trust.

Step-by-Step Funding of the QIT in Nevada

Whether the applicant resides in Las Vegas, Sparks, or Carson City, establishing a Miller Trust is a precise legal process. It creates a special bank account that acts as a funnel. Because the excess income goes into the trust, Nevada Medicaid no longer counts it against the applicant's eligibility limit.

Step 1: Draft the Irrevocable Trust Document

The first step is having an attorney draft a legal QIT document. The trust must be irrevocable, meaning it cannot be canceled or easily changed once signed. Crucially, the trust must include a provision stating that upon the Medicaid recipient's death, the state of Nevada is the first beneficiary to recover the costs paid for their care.

Step 2: Open the Trust Bank Account

Take the signed trust document and a tax ID number (EIN) to a local bank to open a trust account. Not all bank branches understand Miller Trusts, so you may need to speak with a branch manager. The account should be titled in the name of the trust.

Step 3: Deposit Income Correctly

You must fund the trust account every single month. You can deposit only the applicant's income into this account-never assets like savings or proceeds from selling a house. All income from a single source (like a Social Security check) must go in entirely; you cannot split a check.

Step 4: Submit to the State Agency

When applying for care, you must provide a copy of the trust document and bank statements to the Nevada Division of Welfare and Supportive Services, Las Vegas or your local office. You will file this alongside Form 2920-EM, Nevada, Division of Welfare and Supportive Services, Application for Assistance.

What Allowable Medical Expenses Can Be Paid?

Money that goes into the Qualified Income Trust does not just sit there. The trustee (usually a reliable family member) must distribute the funds each month to pay for very specific, allowable expenses. If the money is spent on unapproved items, Medicaid eligibility can be revoked.

Managing VA Pensions vs. Social Security

Funding the trust requires understanding different types of income. Social Security and standard pensions are counted toward the income limit and can be funneled into the Miller Trust. However, Veterans Affairs (VA) benefits can be tricky. Some VA benefits, like Aid and Attendance, are generally not considered countable income by Medicaid and therefore should not be deposited into the QIT. Mixing non-countable VA benefits with countable income in the trust can cause auditing nightmares with the Nevada Division of Welfare and Supportive Services, Reno.

How Long Does the Process Take?

Setting up the trust can be done quickly-often within 3 to 5 days if you hire a skilled local attorney. However, the bank account must be opened and funded in the exact month you want Medicaid eligibility to begin. If you miss the funding deadline for the month, you will be personally responsible for that month's nursing home bill.

Frequently Asked Questions (FAQ)