Miller Trust / Qualified Income Trust (Nevada)

NEVADA QUALIFIED INCOME TRUST (MILLER TRUST / INCOME CAP TRUST)

IRREVOCABLE INCOME TRUST AGREEMENT

TRUST CAPTION

I. RECITALS

WHEREAS, [SETTLOR FULL LEGAL NAME] (hereinafter "Settlor"), now has a monthly gross income that exceeds the current Nevada Medicaid institutional income limit (300% of the SSI Federal Benefit Rate) established under 42 U.S.C. § 1396a(a)(10)(A)(ii)(V); and

WHEREAS, the total monthly income received by Settlor is not sufficient to pay for expenses associated with long-term care services and related services; and

WHEREAS, Settlor's other countable resources have been reduced to the level required by the Nevada Division of Welfare and Supportive Services ("DWSS") and the Division of Health Care Financing and Policy ("DHCFP") for Medicaid resource eligibility; and

WHEREAS, Nevada is an income-cap state and does not permit "spend down" of excess income for institutional Medicaid eligibility, so that Settlor must establish a Qualified Income Trust pursuant to Section 1917(d)(4)(B) of the Social Security Act (42 U.S.C. § 1396p(d)(4)(B)) and the Nevada Medicaid Services Manual Chapter 100 in order to qualify for Medicaid long-term care benefits; and

WHEREAS, the principal purpose of this Trust is to receive all income payments due Settlor in excess of the Medicaid institutional income limit, including Social Security benefits, retirement benefits, pension benefits, interest, dividends, annuity payments, and any other recurring income;

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants set forth herein, Settlor and Trustee agree as follows:

II. PARTIES

A. Settlor

B. Trustee

C. Remainder Beneficiary

III. DECLARATION OF IRREVOCABILITY

This Trust is hereby declared IRREVOCABLE. Settlor expressly waives any right to revoke, amend, alter, or modify this Trust except as required to comply with subsequent changes in federal Medicaid law, Nevada Medicaid law, the Nevada Medicaid Services Manual, or the DWSS Medical Assistance Manual, and only with the prior written approval of DWSS and DHCFP.

IV. FUNDING AND TRUST CORPUS

A. Income to be Deposited

The Trustee shall receive into the Trust only Settlor's income (no resources). Settlor shall direct or assign the following monthly income streams to the Trust account:

B. Initial Deposit / Effective Date

The effective date of this Trust shall be [__/__/____]. The Trust must be funded with Settlor's excess income each month in which Settlor seeks Medicaid eligibility. Funding must occur in the same calendar month income is received.

C. Trust Bank Account

The Trustee shall establish and maintain a separate, federally-insured bank account titled in substantially the following form:

"[TRUSTEE NAME], Trustee of THE [SETTLOR NAME] INCOME TRUST u/a/d [DATE]"

V. ADMINISTRATION AND DISTRIBUTIONS

A. Income Cap Mechanics

(1) Nevada Medicaid disregards income deposited into a properly drafted and funded Qualified Income Trust for purposes of the institutional income limit (300% of the SSI Federal Benefit Rate).

(2) The income received by, and held in, this Trust shall not be counted as available income to Settlor for purposes of determining Medicaid eligibility under NRS Ch. 422 and the DWSS Medical Assistance Manual.

(3) The Trust may hold income only — it may not hold assets, resources, gifts, or any third-party contributions.

B. Patient Liability

The Trustee shall calculate Patient Liability monthly in accordance with the DWSS Medical Assistance Manual (Appendix C, MAABD Income Standard Chart) and remit Patient Liability to the long-term care facility from Trust funds after first paying the allowable deductions specified in Section V.C.

C. Permissible Monthly Distributions

The Trustee shall make distributions from the Trust each month in the following statutory order of priority:

D. Investment Standard

The Trustee shall hold Trust funds in a federally insured banking institution. The Trustee shall not invest the Trust corpus in securities, real estate, life insurance, or other non-cash investments. The Nevada Uniform Prudent Investor Act (NRS § 164.700 et seq.) is modified to require maintenance of cash deposits only.

E. No Discretionary Distributions for Settlor's Benefit Beyond Allowed Items

The Trustee has no discretion to make distributions outside the categories listed in Section V.C. Any distribution outside those categories is a violation of this Trust and may cause loss of Medicaid eligibility and a transfer-of-asset penalty under 42 U.S.C. § 1396p(c).

VI. REPORTING AND ACCOUNTING

A. Annual Accounting to DHCFP / DWSS

The Trustee shall furnish to DWSS and DHCFP, upon request and at each annual Medicaid redetermination, an accounting showing all receipts and disbursements of the Trust during the prior accounting period.

B. Notice of Material Changes

The Trustee shall notify DWSS and DHCFP within thirty (30) days of:

☐ Death of Settlor
☐ Termination of Settlor's Medicaid eligibility
☐ Change of Trustee
☐ Change of Trust bank account
☐ Material change in Settlor's income sources or amounts
☐ Termination of this Trust for any reason

C. Records Retention

The Trustee shall retain all bank statements, deposit records, distribution records, receipts, and accounting records for not less than six (6) years after termination of this Trust.

VII. TERMINATION AND ESTATE RECOVERY

A. Termination Events

This Trust shall terminate upon the earliest of the following:

☐ The death of the Settlor;
☐ Termination of the Settlor's Medicaid eligibility (without reasonable expectation of resumption);
☐ The Settlor's income no longer exceeding the current Nevada Medicaid institutional income limit; or
☐ Any other termination of the Trust as approved in writing by DWSS or DHCFP.

B. Mandatory Remainder to DHCFP

Upon termination, all amounts remaining in the Trust shall be paid to the Nevada Division of Health Care Financing and Policy (DHCFP), up to the total amount of medical assistance paid by Nevada Medicaid on behalf of Settlor under the State Medicaid Plan that has not previously been repaid. This obligation is mandatory under 42 U.S.C. § 1396p(d)(4)(B)(iii) and is enforceable under NRS § 422.054 and NRS § 422.29302.

C. Estate Recovery

The Trustee acknowledges that DHCFP maintains an Estate Recovery Program under NRS § 422.054 and NRS § 422.29302 and 42 U.S.C. § 1396p(b), and that DHCFP's right to recover from this Trust upon termination is in addition to any estate recovery claim DHCFP may assert against Settlor's probate or non-probate estate.

D. Payment Procedure

The Trustee shall transmit final payment to DHCFP within sixty (60) days after Settlor's death or other termination event, accompanied by:

☐ Final accounting
☐ Death certificate (if applicable)
☐ Bank statement showing final balance
☐ Trustee's resignation / discharge statement

VIII. GOVERNING LAW AND JURISDICTION

A. Governing Law

This Trust shall be governed by, construed, and enforced under the laws of the State of Nevada, including without limitation the Nevada Trust Code (NRS Ch. 163) and the Nevada Uniform Principal and Income Act (NRS Ch. 164A), to the extent not inconsistent with the Qualified Income Trust requirements of 42 U.S.C. § 1396p(d)(4)(B).

B. Nevada District Court Jurisdiction

Jurisdiction over this Trust is vested in the District Court of [____________________________] County, Nevada, pursuant to NRS § 164.010. Venue is proper in the county of the Settlor's residence or the county where the principal Trust assets are administered.

C. Guardian-Established Trusts

If this Trust is established by a court-appointed guardian under NRS Ch. 159, the Trustee shall attach a certified copy of the District Court Order under NRS § 159.117 authorizing the guardian to establish this Income Trust on behalf of the protected person.

D. Severability

If any provision of this Trust is held invalid under applicable federal Medicaid law or Nevada law, the remaining provisions shall continue in full force and effect, and the invalid provision shall be reformed to most nearly accomplish the intent of qualifying this Trust under 42 U.S.C. § 1396p(d)(4)(B).

E. Spendthrift Provision

To the extent permitted by federal Medicaid law and Nevada law, the interests of any beneficiary in this Trust shall not be subject to voluntary or involuntary alienation, anticipation, assignment, pledge, attachment, or claims of creditors, except for the mandatory remainder interest of the Nevada Division of Health Care Financing and Policy described herein, which shall not be subject to any spendthrift restriction.

IX. EXECUTION

IN WITNESS WHEREOF, this [____________________________________] INCOME TRUST Agreement has been executed on this the [____] day of [__________________], 20[____].

SETTLOR:

____________________________________
[SETTLOR FULL LEGAL NAME], Settlor

TRUSTEE:

____________________________________
[TRUSTEE FULL LEGAL NAME], Trustee

The undersigned Trustee accepts the duties of Trustee under this Trust and agrees to administer this Trust in accordance with 42 U.S.C. § 1396p(d)(4)(B), the Nevada Trust Code (NRS Ch. 163), the Nevada Medicaid Services Manual Chapter 100, and the DWSS Medical Assistance Manual.

X. NOTARY ACKNOWLEDGMENTS

A. Acknowledgment of Settlor

STATE OF NEVADA

COUNTY OF [____________________________]

This instrument was acknowledged before me on [__/__/____] by [SETTLOR FULL LEGAL NAME], as Settlor of THE [____________________________________] INCOME TRUST.

____________________________________
NOTARY PUBLIC, State of Nevada

Printed Name: [____________________________________]

My Commission Expires: [__/__/____]

Commission Number: [____________________________]

(Notary Seal)

B. Acknowledgment of Trustee

STATE OF NEVADA

COUNTY OF [____________________________]

This instrument was acknowledged before me on [__/__/____] by [TRUSTEE FULL LEGAL NAME], as Trustee of THE [____________________________________] INCOME TRUST.

____________________________________
NOTARY PUBLIC, State of Nevada

Printed Name: [____________________________________]

My Commission Expires: [__/__/____]

Commission Number: [____________________________]

(Notary Seal)

XI. TRUSTEE INFORMATION SHEET

XII. FILING AND SUBMISSION CHECKLIST

☐ Original trust document signed by Settlor and Trustee
☐ Both signatures notarized by Nevada notary (NRS Ch. 240)
☐ Trust bank account opened at federally insured institution
☐ Initial deposit made to trust account in month of Medicaid application
☐ Voided check or deposit slip from trust account
☐ Copy of guardianship order (if applicable, under NRS § 159.117)
☐ Copy of durable power of attorney (if Trustee acting as agent under NRS Ch. 162A)
☐ EIN obtained for Trust (IRS Form SS-4) if Trustee is not Settlor
☐ Copy submitted to DWSS District Office for review with Medicaid LTC application (Form 2400)
☐ Copy retained by Trustee
☐ Copy retained by Settlor or Settlor's representative
☐ Standing payment / direct-deposit instructions established for income streams

XIII. SOURCES AND REFERENCES

• 42 U.S.C. § 1396p(d)(4)(B) — Qualified Income Trust (Miller Trust) federal exception
• Section 1917(d)(4)(B) of the Social Security Act
• 42 U.S.C. § 1396p(b) — Medicaid Estate Recovery
• 42 U.S.C. § 1396r-5 — Spousal impoverishment
• 42 C.F.R. § 435.725 — Post-eligibility treatment of income (institutional cases)
• NRS Chapter 422 — Health Care Financing and Policy / Nevada Medicaid
• NRS § 422.001 et seq. — Division of Health Care Financing and Policy
• NRS § 422.054 — Recovery from estates / liens
• NRS § 422.29302 — Recovery from estates of Medicaid recipients
• NRS § 422.27172 — Personal Needs Allowance
• NRS Chapter 163 — Nevada Trust Code
• NRS Chapter 164 — Administration of Trusts
• NRS Chapter 159 — Guardianships
• NRS § 159.117 — Authority to establish trust on behalf of protected person
• NRS Chapter 162A — Durable Powers of Attorney
• NRS Chapter 240 — Notaries Public
• Nevada Medicaid Services Manual (MSM) Chapter 100 — Medicaid Program (DHCFP) — https://dhcfp.nv.gov
• DWSS Medical Assistance Manual A-100 (Overview), F-100 (Long-Term Care Services), Appendix C (MAABD Income Standard Chart) — https://dss.nv.gov
• Nevada Medicaid: https://www.nevadamedicaid.nv.gov/
• Nevada DHCFP: https://dhcfp.nv.gov/

XIV. ATTORNEY DISCLAIMER

This template is provided for informational and drafting purposes only and does not constitute legal advice or create an attorney-client relationship. Nevada Medicaid Qualified Income Trusts are subject to ongoing federal and state administrative interpretation, and DWSS and DHCFP retain discretion to deny eligibility if the Trust fails to substantially conform to applicable requirements. Improper drafting, funding, or administration of a Miller Trust can result in denial or termination of Medicaid benefits, transfer-of-asset penalties under 42 U.S.C. § 1396p(c), or claims under Nevada's Estate Recovery Program. Consult a Nevada-licensed elder law attorney before executing this Trust.