What Is a Miller Trust? Qualified Income Trust for Medicaid

What Is a Miller Trust (Qualified Income Trust)?

Why It Matters

In 2026, the Medicaid long-term-care income limit in an income-cap state is $2,982 per month for a single applicant, or 300% of the $994 Supplemental Security Income (SSI) federal benefit rate. An applicant earning even a few dollars over that limit is denied.2

Yet the national median cost of a nursing home runs about $9,581 a month for a semi-private room and about $10,798 a month for a private room, far more than that income could cover on its own. A Miller Trust closes the gap between "too much income to qualify" and "not nearly enough to pay."3

Why the Trust Exists

Before 1993, federal Medicaid rules counted every dollar of a person's income when deciding eligibility for long-term care. In states that adopted the 300%-of-SSI income cap, this created a harsh cliff: someone with a modest pension and Social Security could have too much income to qualify but far too little to pay for care out of pocket.1 The trust takes its common name from Miller v. Ibarra, an earlier federal court case that recognized income routed through a trust should not be treated as available to the applicant.

Congress created a federal safe harbor for the approach in 1993 at 42 U.S.C. § 1396p(d)(4)(B). The statute sets three non-negotiable rules for the trust:1

1. The trust can hold only the applicant's income (Social Security, pension, annuity payments). It cannot hold assets such as savings accounts or investments.1
2. Income placed in the trust is not counted toward the Medicaid income limit, but it is still counted in figuring the applicant's "share of cost" toward their care.
3. The state must be named a remainder beneficiary and, when the applicant dies, is repaid from whatever is left in the trust, up to the total amount Medicaid paid for that person's care.

How the Trust Works Each Month

The applicant (or their legal representative) opens a dedicated bank account in the name of the trust, with a trustee named to manage it. Each month the mechanics go like this:1

1. Income comes in. The applicant's Social Security, pension, and other fixed income deposits into the trust account. Some states require all of the applicant's income to flow through the trust; others allow only the excess above the limit.
2. The trust pays out. Within the same month, the trustee covers approved expenses:
   • The applicant's personal needs allowance, the small monthly amount kept for personal expenses. Federal law sets a floor of $30 a month, and most states set it higher; in Texas it is $75.4,5
   • Medicare premiums and any supplemental insurance.
   • The monthly maintenance needs allowance (MMNA) for a non-applicant spouse still living at home, up to a federal maximum of $4,066.50 per month in 2026.6
   • Any unreimbursed medical expenses Medicaid does not cover.
   • The applicant's share of cost to the nursing facility or home-care provider, the amount Medicaid expects the applicant to contribute each month.
3. The balance rolls to zero. After the approved payouts, little or nothing should remain. A trust that builds up a balance can jeopardize eligibility in some states.

The trustee keeps every bank statement and distribution record. Medicaid recertification reviews can reach back years.

Who Needs a Miller Trust

You probably need a Miller Trust if all four of these are true:

• You live in an income-cap state (Texas and Arizona are examples; about half of states use this pathway).5
• Your income exceeds the state's Medicaid institutional income limit, commonly $2,982 per month in 2026, though a few states use different figures.2
• You are applying for nursing-facility Medicaid, a Medicaid HCBS waiver, or PACE. Miller Trusts are for long-term-care Medicaid, not general (acute-care) Medicaid.
• Your assets are already at or below the state's resource limit, typically $2,000 for a single applicant.2

You do not need a Miller Trust if you live in a medically needy state, where you can spend down excess income on medical bills instead, or if your income is already below the limit.

Setting One Up

Setting up a Miller Trust is not a do-it-yourself project. A single drafting mistake can disqualify the applicant, sometimes for months, so most families work with an elder-law attorney.1

Some states publish approved template language (Texas provides one in its Medicaid for the Elderly and People with Disabilities handbook) that can reduce the drafting time. The trust generally has to exist, have a bank account, and receive its first deposit before the month you want Medicaid coverage to begin. Check your state's exact timing rule, because funding the trust late can cost you that month of benefits.

Common Mistakes

Depositing the wrong money. Only the applicant's own income belongs in the trust. If a family member accidentally deposits a savings withdrawal or a gift, the state can argue the arrangement fails.1

Letting the balance grow. The trust is not a savings vehicle. Each month's distributions should bring the balance back near zero; a rising balance can be read as an available resource and cause eligibility problems.1

Reusing an existing trust. A Miller Trust must be a new trust set up specifically for Medicaid eligibility. A pre-existing living trust or family trust cannot be repurposed.

Missing your state's timing rule. Income for the coverage month generally must flow through the trust, not the applicant's personal account. Confirm the deposit deadline with your state Medicaid agency before you file.

Miller Trust vs. Spend-Down

A Miller Trust and a Medicaid spend-down solve the same problem (income above the Medicaid limit) through opposite mechanisms:1

If you do not know which pathway your state uses, verify with your state Medicaid agency before filing.

Common Misconceptions

"A Miller Trust protects my assets." It does not. A Miller Trust handles income only. Asset protection requires separate tools; do not confuse the two.

"I can keep whatever is in the trust when I die." You cannot. Federal law requires the state to be repaid from the trust, up to the amount Medicaid paid for the applicant's care, before any family member inherits anything. In practice there is usually nothing left.1

"My spouse's income has to go in the trust too." It does not. Only the applicant's own income goes into the trust.1

"The trust saves me money." Not directly. The trust makes Medicaid eligibility possible; the savings come from Medicaid then picking up the long-term-care bill that would otherwise run thousands of dollars a month.

Related Terms

• 42 U.S.C. § 1396p(d)(4)(B): The federal statute authorizing Qualified Income Trusts.1
• Income-cap state: A state where Medicaid long-term-care income eligibility uses a hard cap (300% of the SSI federal benefit rate). Over-income applicants in these states generally need a Miller Trust.
• Medically needy state: A state that lets applicants spend down excess income on medical bills to become eligible. These states do not use Miller Trusts.
• Personal Needs Allowance (PNA): The portion of income the applicant keeps each month for personal expenses; a federal floor of $30, set higher by most states ($75 in Texas).4,5
• Monthly Maintenance Needs Allowance (MMNA): The income the trust may pay to support a non-applicant spouse, up to a federal maximum of $4,066.50 in 2026.6
• Medicaid spend-down: The alternative pathway used in medically needy states.
• HCBS waiver: A Miller Trust also qualifies an over-income applicant for HCBS waivers in income-cap states, not just nursing-home Medicaid.

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The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.