By Sarah Geis, senior director of engagement, The Arc of Indiana
Financial planning for someone with a disability is crucial for their future success. Saving for the future is important for everyone, but people with disabilities face additional hurdles of saving without impacting benefits like Medicaid and Social Security. This process can be complex because it means understanding and choosing the best options while ensuring you have accurate information about those options.
Two options that are available, Special Needs Trusts and Miller Trusts, sound similar in name, but have quite different purposes.
Special Needs Trusts
A Special Needs Trust (SNT) preserves financial resources without affecting government benefits. There are two types: third-party, used by individuals who want to provide their own financial resources to a another individual (the beneficiary) receiving government benefits; and first-party, for those who want to save their own financial resources.
Why is this important? Except for third-party trusts, all savings options for individuals with disabilities, such as first-party trusts and ABLE accounts, are subject to Medicaid Estate Recovery. This means that when the beneficiary dies, Medicaid may require reimbursement for the cost of care paid out to that individual. However, with a third-party trust, the person who funds the trust can direct who will receive any remaining funds.
Individuals can establish SNTs privately with an attorney or pooled through a non-profit organization. Private SNTs can hold money and assets like IRAs, stocks, and physical property like homes, while pooled trusts typically only hold cash. Both options are eligible for investment but present different strategies. Private trusts offer more control over investment choices, whereas pooled trusts follow a collective investment approach that can lead to larger returns for each beneficiary.
SNTs can be used for both qualified and non-qualified disability expenses that enhance quality of life. These expenses may cover essentials such as basic living costs and transportation, educational needs, and leisure activities like vacations, travel, entertainment, and hobbies.
Individuals receiving government benefits like SSI, SSDI, or Medicaid can set up a trust. Anyone at any age can establish a trust with a non-profit organization (pooled trust); third-party SNTs are also available to individuals of any age. Anyone under the age of 65 is eligible for private first-party trusts.
SNTs allow families and individuals to save for the future, improving the beneficiary’s quality of life by offering autonomy when desired and support when needed.
Miller Trusts
Miller Trusts, or Qualified Income Trusts shield income, not resources, and are applicable for individuals only in certain circumstances.
To meet eligibility for a Miller Trust, individuals must either: a) receive services through a Home and Community Based Services Medicaid Waiver; or b) live in a nursing home setting and have an income that is more than the Special Income Level (SIL).
In 2023, the SIL is 300% of the monthly SSI payment, or $2,742.00 per month. Individuals earning more than this must place 
the excess income into a Miller Trust to maintain Medicaid eligibility. For instance, if an individual in a nursing home earns $3,000 per month, they must deposit $258.00 into the Miller Trust monthly to keep their Medicaid benefits.
Miller Trust funds can only pay for medical expenses not covered by Medicaid or other specific expenses. If married, the recipient could, if permitted, use funds from a Miller Trust help support the spouse’s basic living needs, depending on the income of the spouse. Remaining funds in the Miller Trust upon the beneficiary’s death are subject to Medicaid Estate Recovery.
Establishing a Miller Trust may require consulting an attorney, although Indiana’s FSSA website provides templates and resources for self-setup.
Both a Special Needs Trust and a Miller Trust might be necessary to safeguard government benefits, depending on the situation. Understanding the differences between these options will aid in confidently choosing the best path forward.
The Arc Master Trust is a pooled special needs trust option for individuals living in Indiana. They are also an informational resource for people wanting to learn more about their savings options. To schedule a free personalized consultation about third-party and first-party trusts, please call 317-977-2375 or email thearctrust@arcind.org. More information is available on our website The Arc Master Trust.
For more information about Miller Trusts, visit the Indiana Family and Social Services Administration website Miller Trust.