Louisiana Miller Trust / Qualified Income Trust (QIT)

LOUISIANA QUALIFIED INCOME TRUST (MILLER TRUST)

TRUST INSTRUMENT CAPTION

ARTICLE I — ESTABLISHMENT AND PURPOSE

1.1 Establishment

BE IT KNOWN, that on this [__] day of [_______________], 20[__], before me, the undersigned Notary Public, and in the presence of the undersigned competent witnesses, personally appeared:

[SETTLOR FULL NAME], a person of the full age of majority, domiciled in [_______________] Parish, Louisiana, residing at [________________________________] ("Settlor" or "Beneficiary"), acting individually or by and through [_______________________________________] as [ ☐ agent under Louisiana mandate / power of attorney ☐ court-appointed curator ☐ legal representative];

AND

[TRUSTEE FULL NAME], a person of the full age of majority, domiciled in [_______________] Parish, Louisiana, residing at [________________________________] ("Trustee"),

who declared and established this Qualified Income Trust by authentic act, pursuant to La. Civ. Code art. 1833 and the Louisiana Trust Code, La. R.S. § 9:1721 et seq.

1.2 Statutory Authority

This Trust is established pursuant to and 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 is intended to satisfy the requirements of:

• LAC Title 50, Part III (Louisiana Administrative Code — Medicaid Eligibility);
• La. R.S. § 46:153 et seq. (Louisiana Medical Assistance Program);
• La. R.S. § 9:1721 et seq. (Louisiana Trust Code), to the extent consistent with the federal Medicaid trust safe harbor;
• All applicable LDH Medicaid Eligibility Manual provisions in effect on the date of execution.

1.3 Purpose

The sole purpose of this Trust is to establish the Settlor's income eligibility for long-term care Medicaid benefits administered by the Louisiana Department of Health, Medicaid Division ("LDH"), by receiving and disbursing the Settlor's monthly income in accordance with federal and Louisiana Medicaid law. This Trust holds only the income of the Settlor; no resource, asset, principal, savings, immovable, movable, or other property other than monthly income shall be deposited into this Trust.

1.4 Irrevocability

This Trust is IRREVOCABLE. The Settlor expressly waives and relinquishes any and all rights to revoke, amend, modify, alter, or terminate this Trust, except as expressly permitted by 42 U.S.C. § 1396p(d)(4)(B) and applicable Louisiana law. This provision is intended to satisfy La. R.S. § 9:2031 et seq. (revocability provisions of the Louisiana Trust Code).

ARTICLE II — FUNDING

2.1 Permitted Contributions

Only the following sources of the Settlor's monthly income shall be deposited into the Trust:

• ☐ Social Security retirement, survivors, or disability benefits
• ☐ Supplemental Security Income (SSI) — only if expressly permitted by LDH policy
• ☐ Private pension and retirement annuity payments
• ☐ Veterans Administration benefits (subject to VA setoff rules)
• ☐ Railroad Retirement Board benefits
• ☐ Civil Service Retirement / FERS payments
• ☐ Annuity income
• ☐ Required minimum distributions (IRA / 401(k))
• ☐ Oil & gas royalty income (recurring, income-character only)
• ☐ Other income: [________________________________]

2.2 Prohibited Contributions

No principal, savings, accumulated assets, immovable property, movable property, gifts, inheritances, lump-sum settlements, succession proceeds, or any other non-income resource shall ever be deposited into the Trust. Any such deposit shall be deemed void ab initio, shall not constitute Trust property, and shall be immediately returned to its source.

2.3 Funding Mechanism

The Trustee shall establish a dedicated, segregated bank account titled "[SETTLOR NAME] Qualified Income Trust, [TRUSTEE NAME], Trustee" at a federally insured Louisiana financial institution. The account shall use the Settlor's Social Security number as the taxpayer identification number, consistent with grantor trust treatment under Internal Revenue Code §§ 671–679.

ARTICLE III — DISTRIBUTIONS

3.1 Monthly Disbursements

The Trustee shall distribute the income held in the Trust each month in accordance with LDH Medicaid post-eligibility income rules, in substantially the following order of priority:

1. Personal Needs Allowance to the Settlor (currently $[_____]/month per LDH);
2. Health insurance premiums, including Medicare Part B, Part D, and Medicare supplement premiums;
3. Community Spouse Monthly Income Allowance (if applicable), under 42 U.S.C. § 1396r-5 and LDH spousal impoverishment rules;
4. Family Member Income Allowance (if applicable);
5. Court-ordered support obligations (if applicable);
6. Patient Liability / Co-payment to the nursing facility, ICF, or HCBS waiver provider;
7. Reasonable Trustee compensation and administrative expenses of the Trust.

3.2 No Accumulation

The Trustee shall not accumulate income in the Trust beyond a de minimis balance reasonably necessary for account maintenance. Substantially all income deposited each month shall be disbursed within the same calendar month.

3.3 No Discretionary Distributions

The Trustee has no discretion to withhold distributions for any purpose inconsistent with this Article III or applicable LDH policy.

ARTICLE IV — RESIDUAL BENEFICIARY (STATE REIMBURSEMENT)

4.1 Mandatory Payback to LDH

Upon the death of the Settlor, the Trustee shall, prior to any other distribution and as required by 42 U.S.C. § 1396p(d)(4)(B)(iii), pay to the State of Louisiana, Department of Health, Medicaid Division, from any funds remaining in the Trust, an amount equal to the total medical assistance paid on behalf of the Settlor under the Louisiana Medicaid State Plan, including amounts subject to LDH Estate Recovery under La. R.S. § 46:153.4 and 42 U.S.C. § 1396p(b).

4.2 Notice to LDH

Within thirty (30) days of the Settlor's death, the Trustee shall provide written notice to the LDH Estate Recovery Unit, together with a final accounting of all Trust receipts and disbursements.

4.3 Contingent Remainder

After full satisfaction of the LDH claim under Section 4.1, any remaining Trust property shall be distributed to:

[____________________________________________________________]

ARTICLE V — TRUSTEE PROVISIONS (LOUISIANA TRUST CODE)

5.1 Trustee Powers

The Trustee shall have only those powers reasonably necessary to administer this Trust consistent with its limited purpose and consistent with La. R.S. § 9:2061 et seq., including the power to:

• Receive and deposit Settlor's income;
• Maintain the Trust bank account;
• Make distributions in accordance with Article III;
• File tax returns and reports;
• Communicate with LDH, the Social Security Administration, and other payors.

The Trustee shall not have the power to invest principal, lend Trust funds, acquire assets, or take any action inconsistent with the Trust's status as a QIT under 42 U.S.C. § 1396p(d)(4)(B).

5.2 Trustee Qualifications

Pursuant to La. R.S. § 9:1783, the Trustee must be a natural person who is a citizen or resident alien of the United States, or a Louisiana-qualified financial institution. The Settlor shall not serve as Trustee.

5.3 Successor Trustee

If the initial Trustee resigns, becomes incapacitated, dies, or is removed, [SUCCESSOR TRUSTEE FULL NAME] shall serve as successor Trustee. Further successors may be appointed by [________________________________________].

5.4 Trustee Bond

The Trustee shall ☐ serve without bond / ☐ serve with bond in the amount of $[_______], as required by La. R.S. § 9:2171 or by [court / LDH].

5.5 Accounting

The Trustee shall maintain complete records of all Trust receipts and disbursements pursuant to La. R.S. § 9:2088 and shall provide an accounting to the Settlor, to LDH upon request, and to any court of competent jurisdiction.

ARTICLE VI — TAX TREATMENT

The Trust is intended to be treated as a grantor trust for federal income tax purposes under Internal Revenue Code §§ 671–679, with all income reportable on the Settlor's individual income tax return. The Trust shall use the Settlor's Social Security number as its taxpayer identification number.

ARTICLE VII — GENERAL PROVISIONS

7.1 Governing Law

This Trust shall be governed by the laws of the State of Louisiana, including the Louisiana Trust Code, La. R.S. § 9:1721 et seq., to the extent not preempted by or inconsistent with 42 U.S.C. § 1396p and federal Medicaid law.

7.2 Compliance Override

In the event of any conflict between the terms of this Trust and the requirements of 42 U.S.C. § 1396p(d)(4)(B), LAC Title 50, Part III, or LDH policy, the federal and Louisiana Medicaid requirements shall control, and this Trust shall be construed and reformed to comply.

7.3 Severability

If any provision of this Trust is held invalid, the remaining provisions shall remain in full force and effect.

7.4 Spendthrift

To the maximum extent permitted by 42 U.S.C. § 1396p(d)(4)(B) and La. R.S. § 9:2004 et seq., the interest of any beneficiary in income or principal shall not be subject to assignment, anticipation, attachment, seizure, or claims of creditors (other than LDH pursuant to Article IV).

ARTICLE VIII — FORCED HEIRSHIP DISCLAIMER (LOUISIANA-SPECIFIC)

8.1 Acknowledgment of Forced Heirship

The Settlor acknowledges Louisiana's forced heirship regime under La. Civ. Code art. 1493, which protects the legitime of any forced heir (a descendant of the first degree who, at the time of the Settlor's death, is twenty-four years of age or younger, or who, regardless of age, is permanently incapable of taking care of his or her person or administering his or her estate at the time of the Settlor's death due to mental incapacity or physical infirmity).

8.2 No Impairment of Legitime

The Settlor and the Trustee expressly acknowledge and represent that this Qualified Income Trust:

(a) holds only the Settlor's recurring monthly income, and no principal, capital, immovable, or movable property;

(b) is structured to be exhausted each month through distributions for the Settlor's own care and benefit during the Settlor's lifetime;

(c) is not a donation inter vivos in disguise and is not a donation in fraud of the legitime;

(d) does not divest, encumber, or transfer any property that would otherwise comprise the Settlor's calculable estate ("masse") for purposes of computing the legitime under La. Civ. Code art. 1505; and

(e) any residual remaining at the Settlor's death is statutorily required to be paid to LDH under 42 U.S.C. § 1396p(d)(4)(B)(iii), and such payment is a satisfaction of a state Medicaid lien rather than a donation.

8.3 Forced Heirs Identified

The known forced heirs of the Settlor, if any, as of the date of this Trust are:

☐ The Settlor represents that, as of the date of this Trust, there are no forced heirs.

8.4 Reservation of Legitime

Nothing in this Trust shall be construed to impair, reduce, satisfy, or substitute for any forced heir's legitime, which shall be calculated and satisfied from the Settlor's separate estate at death in accordance with Louisiana succession law.

EXECUTION BY AUTHENTIC ACT

STATE OF LOUISIANA
PARISH OF [________________]

This Qualified Income Trust is executed as an AUTHENTIC ACT in accordance with La. Civ. Code art. 1833, before the undersigned Notary Public and two competent witnesses, all of whom were present together with the Settlor and the Trustee, who signed their names in the presence of each other on the date set forth above.

Settlor

Trustee Acceptance

The undersigned accepts the office of Trustee and agrees to administer this Trust in accordance with its terms, 42 U.S.C. § 1396p(d)(4)(B), the Louisiana Trust Code, and applicable LDH policy.

Witnesses

Notary Public

Sworn to and subscribed before me, the undersigned Notary Public, on this [__] day of [_______________], 20[__], at [_______________], Louisiana.

[NOTARIAL SEAL]

SOURCES AND REFERENCES

• 42 U.S.C. § 1396p(d)(4)(B) — federal Qualified Income Trust safe harbor
• 42 U.S.C. § 1396p(b) — Medicaid Estate Recovery
• 42 U.S.C. § 1396a(a)(10)(A)(ii)(V) — 300% SSI income eligibility
• 42 C.F.R. § 435.726 — post-eligibility income treatment
• LAC Title 50, Part III — Louisiana Medicaid Eligibility
• La. R.S. § 46:153 et seq. — Louisiana Medical Assistance Program
• La. R.S. § 46:153.4 — Louisiana Medicaid Estate Recovery
• La. R.S. § 9:1721 et seq. — Louisiana Trust Code
• La. R.S. § 9:1783 — Trustee qualifications
• La. R.S. § 9:2004 et seq. — Spendthrift trust provisions
• La. R.S. § 9:2031 et seq. — Revocability of trusts
• La. R.S. § 9:2061 et seq. — Trustee powers
• La. R.S. § 9:2088 — Trustee accounting
• La. Civ. Code art. 1493 — Forced heirship
• La. Civ. Code art. 1505 — Calculation of disposable portion and legitime
• La. Civ. Code art. 1833 — Authentic act
• Louisiana Department of Health (LDH), Medicaid Division — administering agency
• LDH Medicaid Eligibility Manual (verify current policy on QITs and pooled income trusts; Senate Bill 80 of 2024 authorized pooled income trusts for individuals 65+)