Oklahoma Miller Trust / Qualified Income Trust (QIT)

OKLAHOMA MILLER TRUST / QUALIFIED INCOME TRUST (QIT)

(Irrevocable Income Diversion Trust under 42 U.S.C. § 1396p(d)(4)(B) and OAC 317:35-5-41.6)

TRUST CAPTION

ARTICLE I. ESTABLISHMENT AND PURPOSE

1.1 Establishment.

This Qualified Income Trust (the "Trust") is created by [SETTLOR FULL LEGAL NAME] ("Settlor"), of [COUNTY] County, Oklahoma, on [__/__/____], and is established for the sole and exclusive purpose of enabling the Settlor to obtain or maintain eligibility for medical assistance benefits under Oklahoma's SoonerCare/Medicaid program administered by the Oklahoma Health Care Authority ("OHCA"), with eligibility determinations performed by the Oklahoma Department of Human Services ("OKDHS"), through diversion of income that would otherwise cause the Settlor's gross monthly income to exceed the applicable SoonerCare income cap (the "Special Income Level," equal to three hundred percent (300%) of the Federal SSI Benefit Rate).

1.2 Statutory Authority.

This Trust is intended to qualify in all respects as a "Qualified Income Trust" within the meaning of section 1917(d)(4)(B) of the Social Security Act, 42 U.S.C. § 1396p(d)(4)(B), and as a recognized trust under OAC 317:35-5-41.6. All provisions of this Trust shall be construed and administered consistent with such authorities, OAC 317:35-5-42 (countable income), 63 Okla. Stat. § 5051.1 et seq., and the Oklahoma Trust Act at 60 Okla. Stat. § 175.1 et seq.

1.3 Purpose Statement.

The sole purpose of this Trust is to receive income of the Settlor, hold such income only as is necessary to permit the Settlor to qualify for SoonerCare under Oklahoma's income-cap rules, and disburse such income each month in accordance with applicable federal and Oklahoma Medicaid policy. The Trust is not intended, and shall not be construed, to shelter assets, defeat estate recovery, or accomplish any purpose inconsistent with 42 U.S.C. § 1396p(d)(4)(B) or OAC 317:35-5-41.6.

1.4 Irrevocability.

This Trust is IRREVOCABLE. The Settlor expressly waives and surrenders any power to revoke, amend, alter, modify, 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), OAC 317:35, or Oklahoma Medicaid policy that are essential to maintain the Trust's qualified status.

ARTICLE II. FUNDING AND TRUST CORPUS

2.1 Permitted Funding - Income Only.

The corpus of this Trust shall consist EXCLUSIVELY of income of the Settlor, including but not limited to:

☐ Social Security retirement, survivors, or disability benefits (Title II / RSDI)
☐ Supplemental Security Income (SSI) - only to the extent permitted by OHCA / OKDHS policy
☐ Pension or retirement plan distributions (private, public, governmental, military)
☐ Annuity payments
☐ Veterans' benefits
☐ Workers' compensation periodic payments
☐ Required Minimum Distributions (RMDs) from IRAs or qualified plans
☐ Other unearned income: [________________________________]

2.2 Prohibited Funding.

The following shall NEVER be deposited into this Trust:

(a) Resources of any kind, including cash savings, certificates of deposit, stocks, bonds, mutual funds, real property, or proceeds from the sale of resources;

(b) Income or resources of any person other than the Settlor;

(c) Lump-sum settlements, inheritances, or one-time payments not constituting "income" within the meaning of 20 C.F.R. § 416.1102; and

(d) Gifts or contributions from third parties.

2.3 Funding Mechanics.

Each month, the Settlor (or the Settlor's authorized representative or trustee) shall cause sufficient income to be deposited into the Trust account so that the Settlor's gross monthly income remaining outside the Trust does not exceed the applicable Oklahoma SoonerCare income cap. The Trustee shall maintain a dedicated, segregated bank account titled in the name of the Trust and bearing the Trust's separate taxpayer identification number.

2.4 Pour-Over / Open Trust Status.

This Trust is a "pour over or open trust" within the meaning of OAC 317:35-5-41.6 in that monthly income receivables are added to the principal as received. Consistent with that subsection, the trust terms govern availability of income in the month of receipt and shall be administered to avoid accumulation that would create a countable resource.

ARTICLE III. DISTRIBUTIONS DURING SETTLOR'S LIFETIME

3.1 Mandatory Monthly Distribution Hierarchy.

The Trustee shall, no less frequently than monthly, distribute the entire balance of the Trust account (less any reasonable bank fees and a de minimis reserve as permitted by OHCA / OKDHS) in the following order of priority, consistent with Oklahoma SoonerCare post-eligibility treatment of income rules:

First: Personal Needs Allowance (PNA) for the Settlor, in the amount established by OKDHS Appendix C-1.

Second: Court-ordered or OKDHS-approved Community Spouse Monthly Income Allowance, if applicable, under 42 U.S.C. § 1396r-5 and OAC 317:35-19.

Third: Family Maintenance Allowance for dependent family members, if any, as approved by OKDHS.

Fourth: Health insurance premiums, including Medicare Part B and Part D, Medigap, and other private health insurance premiums of the Settlor.

Fifth: Necessary medical or remedial care expenses of the Settlor that are not subject to payment by SoonerCare or any third party.

Sixth: The remainder, as the "vendor payment" / "patient liability" / "share of cost," to the nursing facility, ICF/IID, or HCBS waiver provider in payment of the Settlor's cost of care.

3.2 No Discretion to Accumulate.

The Trustee shall have NO discretion to accumulate income in the Trust beyond the month of receipt except such minimal amount as may be necessary to maintain the Trust bank account in good standing.

3.3 No Distributions to Settlor in Cash.

Except for the Personal Needs Allowance, no Trust funds shall be distributed directly to the Settlor in cash or cash equivalents that could be deemed a countable resource in the following month under OAC 317:35-5-42.

ARTICLE IV. TRUSTEE

4.1 Trustee Eligibility.

The Settlor may NOT serve as Trustee and shall have no power, authority, or ability to manage, direct, or control the Trust account. Consistent with OAC 317:35-5-41.6, the Trustee shall be independent of the Settlor.

4.2 Appointment of Trustee.

The Settlor appoints [TRUSTEE FULL LEGAL NAME] as Trustee. If [TRUSTEE FULL LEGAL NAME] is unable or unwilling to serve, [SUCCESSOR TRUSTEE FULL LEGAL NAME] shall serve as Successor Trustee.

4.3 Trustee Duties.

The Trustee shall:

(a) Open and maintain a segregated, dedicated Trust bank account at a financial institution insured by the FDIC or NCUA;
(b) Obtain a separate Employer Identification Number (EIN) for the Trust from the IRS;
(c) Deposit income into the Trust each month as required by Article II;
(d) Disburse Trust funds each month in the priority order set forth in Article III;
(e) Maintain complete and accurate records of all deposits and disbursements;
(f) Provide OHCA, OKDHS, and any successor Medicaid agency with copies of all Trust records, bank statements, and accountings upon request, at no cost;
(g) File any required federal and Oklahoma income tax returns for the Trust;
(h) Notify OHCA / OKDHS promptly of any material change in trusteeship, banking, or administration; and
(i) Administer the Trust in strict compliance with 42 U.S.C. § 1396p(d)(4)(B), OAC 317:35-5-41.6, and the Oklahoma Trust Act.

4.4 Trustee Compensation.

The Trustee ☐ shall serve without compensation ☐ shall be entitled to reasonable compensation as permitted by 60 Okla. Stat. § 175 et seq. and approved by OHCA / OKDHS, not to exceed [________________________________].

4.5 No Loans.

The Trustee shall not make any loan from the Trust to the Settlor, the Trustee, or any other person or entity.

4.6 Submission to OKDHS.

Consistent with OAC 317:35-5-41.6, where availability of trust assets is in question, the Trustee shall cooperate with OKDHS Family Support Services Division, Health Related and Medical Services Section, in any review.

ARTICLE V. REMAINDER BENEFICIARY AND ESTATE RECOVERY

5.1 Mandatory State Payback / Reversionary Provision.

Upon the death of the Settlor, the Trustee shall immediately pay to the State of Oklahoma, through the Oklahoma Health Care Authority's Estate Recovery Program (or such other agency designated by Oklahoma law), all amounts remaining in the Trust, up to the total amount of medical assistance paid on behalf of the Settlor by the Oklahoma SoonerCare/Medicaid program. This provision is mandatory under 42 U.S.C. § 1396p(d)(4)(B) and OAC 317:35-5-41.6.

5.2 Multi-State Allocation.

If the Settlor received Medicaid benefits in more than one state, the Trustee shall distribute remaining Trust funds to each such state in proportion to the total amount of Medicaid benefits paid by each state on the Settlor's behalf.

5.3 Residual Remainder.

If, and only if, the Trust contains funds remaining after the State of Oklahoma (and any other state Medicaid agency entitled under Section 5.2) has been paid in full, such residual funds shall be distributed to: [RESIDUAL REMAINDER BENEFICIARY OR "the Settlor's probate estate"].

5.4 Notice of Death.

The Trustee shall provide written notice of the Settlor's death to the OHCA Estate Recovery Program within thirty (30) days of the date of death and shall provide a final accounting.

ARTICLE VI. OHCA / OKDHS REVIEW AND COMPLIANCE

6.1 OHCA / OKDHS Right of Review.

OHCA and OKDHS shall have the right to review this Trust and its administration upon request, consistent with OAC 317:35-5-41.6. The Trustee shall cooperate fully.

6.2 Drafter Identification.

The person who drafted this Trust is identified in the Trust Caption above.

6.3 Savings Clause.

If any provision of this Trust is determined to be inconsistent with the requirements of 42 U.S.C. § 1396p(d)(4)(B), OAC 317:35-5-41.6, or any other applicable federal or Oklahoma Medicaid authority, such provision shall be deemed modified to the minimum extent necessary to bring this Trust into compliance, and the remainder of the Trust shall continue in full force and effect.

6.4 Secondary Income Cap Acknowledgment.

The Settlor and Trustee acknowledge that, under OHCA policy (OAC 317:35-5-41.6 and OKDHS Appendix C-1, Schedule VIII.B), institutionalized individuals whose total monthly income exceeds the average cost of nursing-facility care may be ineligible for SoonerCare regardless of the existence of this Trust. The Trustee shall monitor this secondary cap and notify the Settlor's authorized representative promptly if Settlor's income approaches this limit.

ARTICLE VII. GENERAL PROVISIONS

7.1 Governing Law.

This Trust shall be governed by and construed in accordance with the laws of the State of Oklahoma, including the Oklahoma Trust Act at 60 Okla. Stat. § 175.1 et seq., and applicable federal Medicaid law.

7.2 Spendthrift Provision.

To the maximum extent permitted by law and consistent with the purposes of this Trust, the Settlor's interest in the Trust shall not be subject to voluntary or involuntary alienation, assignment, pledge, attachment, or claims of creditors of the Settlor other than OHCA and any other state Medicaid agency entitled under Article V.

7.3 Severability.

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

7.4 Termination.

This Trust shall terminate upon the earliest of: (a) the death of the Settlor (subject to Article V); (b) exhaustion of the Trust corpus following payment to the State; or (c) a written determination by OHCA / OKDHS that the Trust is no longer required for Settlor's SoonerCare eligibility (subject to OHCA's payback rights).

EXECUTION

Settlor

I, [SETTLOR FULL LEGAL NAME], having read and understood this Qualified Income Trust, and intending to be legally bound, execute it as my free act and deed this [____] day of [____________], 20[____].

Trustee Acceptance

I, [TRUSTEE FULL LEGAL NAME], accept appointment as Trustee of this Qualified Income Trust and agree to administer it in accordance with its terms, 42 U.S.C. § 1396p(d)(4)(B), OAC 317:35-5-41.6, and the Oklahoma Trust Act.

Successor Trustee Acceptance (optional at execution)

NOTARY ACKNOWLEDGMENT - SETTLOR

STATE OF OKLAHOMA )
) ss.
COUNTY OF [________________] )

Before me, the undersigned, a Notary Public in and for said County and State, on this [____] day of [____________], 20[____], personally appeared [SETTLOR FULL LEGAL NAME], to me known to be the identical person who executed the within and foregoing instrument, and acknowledged to me that he/she executed the same as his/her free and voluntary act and deed for the uses and purposes therein set forth.

_______________________________________
Notary Public
My commission expires: [__/__/____]
Commission No.: [________________]
[NOTARY SEAL]

NOTARY ACKNOWLEDGMENT - TRUSTEE

STATE OF OKLAHOMA )
) ss.
COUNTY OF [________________] )

Before me, the undersigned, a Notary Public in and for said County and State, on this [____] day of [____________], 20[____], personally appeared [TRUSTEE FULL LEGAL NAME], to me known to be the identical person who executed the within and foregoing instrument as Trustee, and acknowledged to me that he/she executed the same as his/her free and voluntary act and deed for the uses and purposes therein set forth.

_______________________________________
Notary Public
My commission expires: [__/__/____]
Commission No.: [________________]
[NOTARY SEAL]

SCHEDULE A - INITIAL FUNDING (Income Sources)

Total Gross Monthly Income: $[__________]
Applicable OK SoonerCare Income Cap (300% SSI FBR for execution year): $[__________]
OKDHS Appendix C-1 Average Nursing Facility Cost (secondary cap): $[__________]
Excess to be Diverted Monthly: $[__________]

SCHEDULE B - TRUSTEE ADMINISTRATIVE CHECKLIST

☐ Obtain separate EIN for Trust from IRS (Form SS-4)
☐ Open dedicated Trust bank account titled "[Trust Name], [Trustee Name], Trustee"
☐ Set up monthly deposit / direct deposit of excess income
☐ Establish disbursement order under Article III
☐ Submit fully executed Trust, Schedule A, and bank verification to OKDHS Family Support Services
☐ Confirm SoonerCare eligibility certification with OHCA
☐ Maintain monthly accounting and retain bank statements
☐ Provide annual or on-request accounting to OHCA / OKDHS (OAC 317:35-5-41.6)
☐ Notify OHCA Estate Recovery Program within 30 days of Settlor's death
☐ File IRS Form 1041 (and OK Form 513) annually if required

SOURCES AND REFERENCES

• 42 U.S.C. § 1396p(d)(4)(B) (Qualified Income Trust / Miller Trust authority)
• 42 U.S.C. § 1396r-5 (Treatment of income and resources of married couples)
• OAC 317:35-5-41.6 (Trust accounts - Oklahoma Medicaid)
• OAC 317:35-5-42 (Countable income - aged, blind, disabled)
• OAC 317:35-19 (Spousal impoverishment / community spouse)
• 63 Okla. Stat. § 5051.1 et seq. (Oklahoma Medicaid Program Reform Act / OHCA)
• 60 Okla. Stat. § 175.1 et seq. (Oklahoma Trust Act)
• OKDHS Appendix C-1, Schedule VIII.B (Aged, Blind, or Disabled Individuals - income limits)
• POMS SI 01120.203 (SSA Program Operations Manual - Trusts)
• Oklahoma Health Care Authority - https://oklahoma.gov/ohca