Unfortunately, your father appears to live in an “Income Cap” state that has strict income limits on eligibility for Medicaid. The excess income, just $8 a month in your father’s case, can be sheltered in a so-called “Miller” trust. This appears to be what the law firm is recommending and it is the usual way to deal with excess income. We don’t know of any way around this, but some states may have different laws. You can check with another law firm for a second opinion or with a local senior legal services agency.
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