Idaho Miller Trust / Qualified Income Trust

IDAHO QUALIFIED INCOME TRUST (MILLER TRUST)

IRREVOCABLE TRUST AGREEMENT UNDER 42 U.S.C. § 1396p(d)(4)(B)

ARTICLE I. ESTABLISHMENT AND PURPOSE

1.1 Establishment

This Qualified Income Trust ("Trust") is established this [__] day of [__________], 20[__], by [____________________________] (the "Settlor"), of [City], [County] County, Idaho, who hereby transfers and assigns to [____________________________] (the "Trustee") the income described in Article III, IN TRUST, for the uses and purposes set forth below.

1.2 Statutory Authority

This Trust is intended to qualify as a "Qualified Income Trust" under Section 1917(d)(4)(B) of the Social Security Act, codified at 42 U.S.C. § 1396p(d)(4)(B), and as an "income trust" exempt from countable income for purposes of Idaho Medicaid eligibility under IDAPA 16.03.05.872 and related provisions of the Idaho Administrative Procedure Act and Idaho Code § 56-209 et seq.

1.3 Purpose

The sole purpose of this Trust is to enable the Settlor to qualify for and continue to receive Idaho Medicaid long-term care benefits administered by the Idaho Department of Health and Welfare ("IDHW") notwithstanding monthly gross income in excess of the income standard set forth in IDAPA 16.03.05.720 (three times the federal SSI benefit rate, the "300% SSI cap").

1.4 Irrevocability

This Trust is and shall be IRREVOCABLE. The Settlor expressly disclaims and renounces any right or power to alter, amend, modify, revoke, or terminate this Trust, in whole or in part, except as required to conform to changes in 42 U.S.C. § 1396p(d)(4)(B), IDAPA 16.03.05, or other governing law as administered by IDHW.

ARTICLE II. PARTIES

2.1 Settlor Information

☐ The Settlor is the Medicaid applicant / recipient.
☐ The Settlor is acting through a duly appointed attorney-in-fact under a valid Idaho durable power of attorney dated [__/__/____].
☐ The Settlor is acting through a court-appointed guardian / conservator under Idaho Code § 15-5-101 et seq.

2.2 Trustee

The Trustee shall be an individual or entity authorized to act as trustee in Idaho. The Settlor shall not serve as Trustee.

☐ Individual trustee (family member, friend, or fiduciary): [____________________________]
☐ Idaho state-chartered bank or trust company: [____________________________]
☐ National bank with Idaho trust powers: [____________________________]
☐ Successor trustee: [____________________________]

2.3 Trustee's Acceptance

The Trustee accepts the Trust and agrees to administer it in accordance with this instrument, 42 U.S.C. § 1396p(d)(4)(B), IDAPA 16.03.05, the Idaho Trust Code (Idaho Code Title 15, Chapter 7), and instructions issued by IDHW.

ARTICLE III. TRUST CORPUS

3.1 Initial Funding

The Settlor hereby assigns, transfers, and directs to be deposited into a segregated, federally insured Idaho bank account titled in the name of the Trust (the "Trust Account") the following sources of the Settlor's monthly income:

☐ Social Security retirement, survivors, or disability insurance benefits
☐ Supplemental Security Income (only if specifically directed by IDHW)
☐ Pension or retirement plan distributions from: [____________________________]
☐ Veterans Administration benefits (excluding Aid & Attendance to the extent excluded under IDAPA 16.03.05.720.04(c))
☐ Railroad Retirement benefits
☐ Annuity payments from: [____________________________]
☐ Other income: [____________________________]

3.2 Income-Only Restriction

The Trust shall be composed solely of the Settlor's income as defined under 42 U.S.C. § 1396p(d)(4)(B) and accumulated interest thereon. No assets, resources, gifts, or third-party contributions shall be deposited into the Trust. Any deposit of resources shall be void ab initio and shall be returned to the source.

3.3 Trust Account

The Trustee shall open and maintain a separate, interest-bearing checking or money market account at a federally insured depository institution doing business in Idaho. The account shall be titled substantially as follows:

"[Trustee Name], Trustee of the [Settlor Name] Qualified Income Trust under Agreement dated [__/__/____]"

The Trust Account shall use the Trust's own federal Employer Identification Number (EIN) and shall not be commingled with any other funds.

ARTICLE IV. DISTRIBUTIONS

4.1 Permitted Distributions

The Trustee shall, in each calendar month, distribute the Trust Account balance in the following order of priority, consistent with IDAPA 16.03.05 and IDHW post-eligibility treatment of income rules:

1. Personal Needs Allowance (PNA) to the Settlor in the amount allowed under IDAPA 16.03.05.
2. Community Spouse Monthly Income Allowance (CSMIA) to the Settlor's spouse, if any, as calculated by IDHW under the federal spousal impoverishment rules.
3. Family Maintenance Allowance for dependent family members, if any, as determined by IDHW.
4. Health Insurance Premiums, including Medicare Part B, Part D, and Medicare Supplement / Advantage premiums.
5. Guardian / Conservator fees approved by IDHW or the Idaho court of competent jurisdiction.
6. Trustee Fees in a reasonable amount approved by IDHW, not to exceed the maximum permitted under IDAPA guidance.
7. Bank service charges for the Trust Account.
8. Patient Liability (Share of Cost) — the remaining balance shall be paid to the long-term care facility or HCBS provider as required by IDHW.

4.2 Prohibited Distributions

The Trustee shall make NO distribution for the benefit of any person other than the Settlor (or the Settlor's spouse / dependents as expressly permitted above) during the Settlor's lifetime. No distribution shall be made that would render the Settlor ineligible for Medicaid or that would constitute an uncompensated transfer subject to the asset transfer penalty under IDAPA 16.03.05.720.04(e).

4.3 No Accumulation

The Trust is designed to "zero out" monthly. The Trustee shall distribute the entire monthly balance, less reasonable reserves for bank fees and minor accumulated interest, before the close of each calendar month.

ARTICLE V. RESIDUAL BENEFICIARY AND ESTATE RECOVERY

5.1 Mandatory State Payback

Upon the death of the Settlor, the Trustee shall pay to the State of Idaho, Department of Health and Welfare, from any amounts remaining in the Trust, an amount equal to the total medical assistance paid on behalf of the Settlor under the Idaho Medicaid program, in accordance with 42 U.S.C. § 1396p(d)(4)(B)(iii) and Idaho Code § 56-218 (Idaho Medicaid Estate Recovery).

5.2 Notice of Death

Within thirty (30) days after the Settlor's death, the Trustee shall:

☐ Provide written notice to the IDHW Estate Recovery Program at its then-current address;
☐ Provide a certified copy of the death certificate;
☐ Provide a final accounting of the Trust Account.

5.3 Residual Distribution

After full satisfaction of the State's claim under Section 5.1, any remaining funds shall be distributed to:

☐ The Settlor's estate, to be administered under Idaho Code Title 15 (Idaho Uniform Probate Code).
☐ The following residual beneficiary(ies):

ARTICLE VI. TRUSTEE POWERS AND DUTIES

6.1 Powers

The Trustee shall have all powers granted by the Idaho Trust Code (Idaho Code Title 15, Chapter 7) and the Uniform Prudent Investor Act as adopted in Idaho, limited as necessary to comply with 42 U.S.C. § 1396p(d)(4)(B) and IDAPA 16.03.05.

6.2 Duties

The Trustee shall:

• Administer the Trust in good faith and consistent with its terms and the interests of the Settlor and IDHW as residual beneficiary;
• Maintain accurate records of all deposits, distributions, and balances;
• File any required federal and Idaho fiduciary income tax returns (IRS Form 1041 and Idaho Form 66 if applicable);
• Furnish IDHW with quarterly or annual statements upon request;
• Notify IDHW within ten (10) business days of any material change in funding, trusteeship, or Settlor circumstances.

6.3 Bond

☐ The Trustee shall serve without bond.
☐ The Trustee shall post a bond in the amount of $[____________].

6.4 Compensation

The Trustee shall be entitled to reasonable compensation, not to exceed amounts permitted by IDHW guidance, payable from the Trust Account as a permitted distribution under Section 4.1(6).

ARTICLE VII. ADMINISTRATIVE PROVISIONS

7.1 Governing Law

This Trust shall be governed by, and construed in accordance with, the laws of the State of Idaho, including the Idaho Trust Code, and the applicable federal Medicaid statutes and regulations.

7.2 Severability

If any provision of this Trust is held invalid or unenforceable, the remaining provisions shall continue in full force and effect to the maximum extent permitted by law.

7.3 Conformity to Law

This Trust shall be construed and, if necessary, judicially reformed under Idaho Code § 15-7-410 (modification of irrevocable trust to achieve the Settlor's tax or eligibility objectives) so as to qualify at all times as a Qualified Income Trust under 42 U.S.C. § 1396p(d)(4)(B) and as an exempt income trust under IDAPA 16.03.05.872.

7.4 Spendthrift

The interest of the Settlor in this Trust shall not be subject to voluntary or involuntary alienation, assignment, attachment, or anticipation by any creditor, except as required to satisfy IDHW's payback claim under Article V.

7.5 Notices

All notices to IDHW shall be sent to:

Idaho Department of Health and Welfare
Estate Recovery / Bureau of Long-Term Care
[Current address as published by IDHW]

ARTICLE VIII. EXECUTION

IN WITNESS WHEREOF, the Settlor and Trustee have executed this Qualified Income Trust on the date first written above.

Settlor

Trustee

NOTARY ACKNOWLEDGMENT (IDAHO)

STATE OF IDAHO )
) ss.
COUNTY OF [____________])

On this [__] day of [__________], 20[__], before me, the undersigned, a Notary Public in and for said State, personally appeared [____________________________], known or identified to me to be the Settlor, and [____________________________], known or identified to me to be the Trustee, whose names are subscribed to the within instrument, and acknowledged to me that they executed the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written.

SCHEDULE A — INITIAL FUNDING

SCHEDULE B — TRUSTEE INSTRUCTIONS CHECKLIST

☐ Obtain federal EIN for the Trust (IRS Form SS-4).
☐ Open dedicated Trust Account at federally insured Idaho depository institution.
☐ Provide IDHW with copy of executed Trust and Schedule A within 10 days.
☐ Redirect income sources to Trust Account effective [__/__/____].
☐ Establish monthly distribution schedule per Article IV.
☐ Calendar annual fiduciary tax return filing.
☐ Provide IDHW Estate Recovery notice within 30 days of Settlor's death.

SOURCES AND REFERENCES

• 42 U.S.C. § 1396p(d)(4)(B) — Qualified Income Trusts
• Idaho Code § 56-209 et seq. — Idaho Medical Assistance Act
• Idaho Code § 56-218 — Recovery of Medicaid Payments from Estates
• Idaho Code Title 15, Chapter 7 — Idaho Trust Code
• IDAPA 16.03.05 — Rules Governing Eligibility for Aged, Blind, and Disabled Medicaid
• IDAPA 16.03.05.720 — Long-Term Care Income and Resource Limits
• IDAPA 16.03.05.872 — Income Trust Exemption
• Idaho Department of Health and Welfare — Medicaid Long-Term Care and Estate Recovery Program