Tennessee Miller Trust / Qualified Income Trust (QIT)

TENNESSEE MILLER TRUST / QUALIFIED INCOME TRUST AGREEMENT

TRUST CAPTION

ARTICLE I — DECLARATION AND PURPOSE

1.1 Declaration of Trust. [_______________________________] ("Settlor"), a resident of [____________________] County, Tennessee, hereby establishes this irrevocable trust (the "Trust") to be known as THE [____________________________] QUALIFIED INCOME TRUST, dated [__/__/____].

1.2 Statutory Authority. This Trust is created and shall be administered as a "qualified income trust" within the meaning of 42 U.S.C. § 1396p(d)(4)(B) and as a "Qualified Income Trust" or "Miller Trust" within the meaning of Tenn. Comp. R. & Regs. 1240-03-03-.03. It is the express intent of the Settlor that this Trust qualify under federal Medicaid law, under the Tennessee Medical Assistance Act (T.C.A. § 71-5-101 et seq.), and under the Bureau of TennCare's rules so that income deposited into this Trust shall not be counted against the Medicaid Income Cap (MIC) applicable to TennCare long-term services and supports under the TennCare CHOICES program.

1.3 Purpose. The sole purpose of this Trust is to enable the Settlor, who is or who anticipates becoming a recipient of TennCare long-term services and supports (including TennCare CHOICES nursing facility benefits or Home- and Community-Based Services), to satisfy the income-eligibility requirements of the TennCare Medicaid program by directing the Settlor's gross monthly income into this Trust.

1.4 Irrevocability. This Trust is IRREVOCABLE. The Settlor shall have no power to revoke, amend, modify, or terminate this Trust, nor any power to alter the beneficial interests created hereunder, except as required by federal or Tennessee law or as ordered by a court of competent jurisdiction. The Trust is established under the Tennessee Uniform Trust Code, T.C.A. § 35-15-101 et seq.

Checklist of Qualifying Requirements (Tenn. Comp. R. & Regs. 1240-03-03-.03)

☐ The Trust consists only of the individual's pension income, Social Security income, and other monthly income
☐ The Trust is irrevocable
☐ The Trust provides that the State of Tennessee (Bureau of TennCare) receives all amounts remaining in the Trust upon the death of the beneficiary, up to the total medical assistance paid
☐ Income is direct-deposited or transferred into the Trust each month
☐ Trustee disbursements comply with the priority of payments below
☐ The Trust complies with the TennCare CHOICES rules in effect on the date of application

ARTICLE II — FUNDING / TRUST CORPUS

2.1 Permitted Contributions. The corpus of this Trust shall consist only of the following income of the Settlor:

☐ Social Security retirement, survivor, or disability income (OASDI)
☐ Railroad Retirement benefits
☐ Veterans Administration benefits (other than Aid & Attendance / Housebound, which are excluded from countable income)
☐ Public or private pension or retirement-plan payments
☐ Annuity payments payable to the Settlor
☐ Other monthly income of the Settlor: [____________________________________]

2.2 Prohibited Contributions. No assets, resources, or income belonging to any person other than the Settlor shall be deposited into this Trust. The following shall not be contributed: spousal income, lump-sum inheritances, gifts from third parties, proceeds from the sale of resources, tax refunds, VA Aid & Attendance or Housebound benefits, or any non-countable income.

2.3 All-or-Nothing Rule. With respect to any single income source designated for deposit into the Trust, the entire monthly payment must be deposited; partial deposits are prohibited.

2.4 Designation of Income Sources. The Settlor designates the following income source(s) for monthly deposit into this Trust:

ARTICLE III — TRUSTEE

3.1 Initial Trustee. The initial Trustee of this Trust shall be [_______________________________________________], of [_______________________________], [_____], Tennessee.

3.2 Successor Trustee. If the initial Trustee dies, resigns, becomes incapacitated, or otherwise ceases to serve, the successor Trustee shall be [_______________________________________________].

3.3 Trustee Disqualification. The Settlor shall not serve as Trustee. The Trustee should not be a person whose income or resources are otherwise required to be deemed available to the Settlor for TennCare eligibility purposes.

3.4 Trustee Bond. ☐ No bond required (T.C.A. § 35-15-702) ☐ Bond required in the amount of $[____________]

3.5 Trustee Powers. The Trustee shall have all powers granted under the Tennessee Uniform Trust Code, T.C.A. § 35-15-101 et seq., subject to the express limitations of this Trust instrument, including the power to open and maintain a dedicated trust bank account at a federally insured Tennessee financial institution titled in substantially the following form: "[Trustee Name], Trustee of The [Settlor Name] Qualified Income Trust dated [Date]".

3.6 Trustee Compensation. ☐ Trustee shall serve without compensation ☐ Trustee shall receive reasonable compensation as permitted under T.C.A. § 35-15-708, consistent with TennCare rules

ARTICLE IV — DISTRIBUTIONS

4.1 Mandatory Monthly Distributions in Order of Priority. The Trustee shall, in each calendar month, distribute the Trust corpus in the following order:

(a) Personal Needs Allowance (PNA). First, to the Settlor, the Tennessee Medicaid Personal Needs Allowance currently authorized by TennCare.

(b) Community Spouse Monthly Maintenance Needs Allowance (MMMNA). Second, if applicable, to the Settlor's community spouse, the Monthly Maintenance Needs Allowance permitted under 42 U.S.C. § 1396r-5 and TennCare rules.

(c) Family Maintenance Allowance. Third, any family-member maintenance allowance allowed by TennCare under Tenn. Comp. R. & Regs. 1240-03.

(d) Health Insurance Premiums and Uncovered Medical Costs. Fourth, Medicare Part B and Part D premiums, supplemental health-insurance premiums, and medically necessary expenses not paid by TennCare or Medicare.

(e) Patient Liability / Cost of Care. Fifth, the Settlor's monthly patient liability (share of cost) to the nursing facility or HCBS / CHOICES provider as determined by the Tennessee Department of Human Services and TennCare.

(f) Trustee Fees and Bank Fees. Sixth, reasonable fees and administrative expenses of the Trust.

4.2 No Accumulation. It is the intent of the Settlor that, to the maximum extent practicable, all income deposited into the Trust in any given month be fully distributed in that month. The Trustee shall not accumulate income in the Trust except in nominal amounts necessary to maintain the trust account.

4.3 No Discretionary Distributions to Third Parties. Except as expressly permitted by Section 4.1, the Trustee shall make no distribution to any person other than the Settlor or for the Settlor's direct benefit.

ARTICLE V — TENNCARE AS RESIDUAL REMAINDER BENEFICIARY

5.1 State Payback Provision. Upon the death of the Settlor, the Trustee shall, before any other distribution, pay to the Bureau of TennCare, State of Tennessee from any amounts remaining in this Trust an amount equal to the total medical assistance paid on behalf of the Settlor under the TennCare State Plan, as required by 42 U.S.C. § 1396p(d)(4)(B) and Tenn. Comp. R. & Regs. 1240-03-03-.03.

5.2 Notice of Death. The Trustee shall notify the Bureau of TennCare and the TennCare Estate Recovery Unit in writing within thirty (30) days of the Settlor's death and shall request a final accounting of medical assistance paid.

5.3 Estate Recovery. Nothing in this Trust shall limit the rights of the Bureau of TennCare under its estate recovery program (T.C.A. § 71-5-116) to recover the cost of medical assistance from the Settlor's estate or from this Trust.

5.4 Contingent Remainder. Any amount remaining in the Trust after full satisfaction of the TennCare claim under Section 5.1 shall be distributed to: [_______________________________________________] (contingent residual beneficiary).

ARTICLE VI — ADMINISTRATIVE PROVISIONS

6.1 Governing Law. This Trust shall be governed by, construed under, and administered in accordance with the laws of the State of Tennessee, including the Tennessee Uniform Trust Code (T.C.A. § 35-15-101 et seq.), the Tennessee Medical Assistance Act (T.C.A. § 71-5-101 et seq.), and applicable TennCare and CHOICES rules (Tenn. Comp. R. & Regs. Chapter 1240-03).

6.2 Severability. If any provision of this Trust is determined by a court of competent jurisdiction or by the Bureau of TennCare or Tennessee Department of Human Services to disqualify the Trust under 42 U.S.C. § 1396p(d)(4)(B) or Tenn. Comp. R. & Regs. 1240-03-03-.03, that provision shall be deemed reformed or severed to the minimum extent necessary to preserve the Trust's qualification.

6.3 Reformation for Medicaid Qualification. The Trustee is authorized to petition a Tennessee court of competent jurisdiction, pursuant to T.C.A. § 35-15-415 (reformation to correct mistakes) and T.C.A. § 35-15-416 (modification to achieve settlor's tax / public-benefit objectives), to reform this Trust as necessary to maintain its qualification as a Miller Trust / QIT.

6.4 Spendthrift Provision. No interest of the Settlor or any beneficiary in the income or principal of this Trust shall be subject to assignment, anticipation, alienation, attachment, garnishment, or claims of creditors, except as required by federal or Tennessee Medicaid law and by Article V of this Trust.

6.5 Records and Accounting. The Trustee shall maintain complete records of all deposits to and disbursements from the Trust and shall furnish such records to TennCare and the Tennessee Department of Human Services upon request and to the Settlor (or the Settlor's authorized representative) at least annually, consistent with the trustee duty to inform and report under T.C.A. § 35-15-813.

6.6 Tax Identification. ☐ The Trust shall use the Settlor's Social Security Number as a grantor trust under IRC § 671 ☐ The Trust shall obtain a separate Employer Identification Number

ARTICLE VII — EXECUTION

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

Settlor

Signature: [______________________________________________]

Printed Name: [__________________________________________]

Date: [__/__/____]

Trustee (Acceptance of Trust)

I accept appointment as Trustee pursuant to T.C.A. § 35-15-701 and agree to administer this Trust in accordance with its terms, 42 U.S.C. § 1396p(d)(4)(B), Tenn. Comp. R. & Regs. 1240-03-03-.03, and applicable Tennessee law.

Signature: [______________________________________________]

Printed Name: [__________________________________________]

Date: [__/__/____]

NOTARIAL ACKNOWLEDGMENT (Settlor)

STATE OF TENNESSEE )
)
COUNTY OF [__________] )

Personally appeared before me, the undersigned, a Notary Public in and for the State and County aforesaid, [_______________________________], with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who, upon oath, acknowledged that he/she executed the foregoing instrument as Settlor for the purposes therein contained.

Witness my hand and official seal at office this [____] day of [______________], 20[____].

Notary Public Signature: [______________________________________]

Printed Name: [__________________________________________]

My commission expires: [__/__/____]

(SEAL)

NOTARIAL ACKNOWLEDGMENT (Trustee)

STATE OF TENNESSEE )
)
COUNTY OF [__________] )

Personally appeared before me, the undersigned, a Notary Public in and for the State and County aforesaid, [_______________________________], with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who, upon oath, acknowledged that he/she executed the foregoing instrument as Trustee for the purposes therein contained.

Witness my hand and official seal at office this [____] day of [______________], 20[____].

Notary Public Signature: [______________________________________]

Printed Name: [__________________________________________]

My commission expires: [__/__/____]

(SEAL)

SCHEDULE A — INITIAL FUNDING

Trust Bank Account:

• Institution: [_______________________________________________]
• Account Title: [Trustee Name], Trustee of The [Settlor Name] Qualified Income Trust dated [__/__/____]
• Account Number (last 4): [__________]
• Date Opened: [__/__/____]

SOURCES AND REFERENCES

• 42 U.S.C. § 1396p(d)(4)(B) — Qualified Income Trust authority
• Tenn. Comp. R. & Regs. 1240-03-03-.03 — TennCare Medicaid resource and QIT rules
• Tenn. Comp. R. & Regs. Chapter 1240-03 — Technical and Financial Eligibility Requirements for Medicaid
• T.C.A. § 71-5-101 et seq. — Tennessee Medical Assistance Act
• T.C.A. § 71-5-116 — TennCare Estate Recovery
• T.C.A. § 35-15-101 et seq. — Tennessee Uniform Trust Code
• TennCare CHOICES Policy Manual — https://www.tn.gov/content/dam/tn/tenncare/documents/CHOICES.pdf
• Tennessee Department of Human Services (DHS) — Medicaid / TennCare eligibility processing
• Bureau of TennCare — https://www.tn.gov/tenncare