What Is a Miller Trust? Qualified Income Trust for Medicaid

What Is a Miller Trust (Qualified Income Trust)?

Why It Matters

In 2026, 300% of the $994 Supplemental Security Income (SSI) federal benefit rate is $2,982 per month, the level above which federal matching funds stop for people in institutions whose Medicaid rests on a state's special income standard. It isn't a limit every state publishes. Each state sets its own level in its state plan, and the figures differ: Washington's 2026 limit is $2,982, while Idaho lists $3,002. Look up the number your own state uses. An applicant whose income is even a few dollars over their state's limit does not meet that income test.5

Yet the national median cost of a nursing home runs about $114,975 a year for a semi-private room and about $129,575 a year 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."6

Why the Trust Exists

In an income-cap state, the special income level works as a hard line. Federal matching funds for people whose eligibility rests on it are available only when income before deductions stays at or under 300% of the SSI rate, so someone with a modest pension and Social Security can have too much income to qualify that way while having far less than a nursing home costs.5,6

Congress created a federal safe harbor for the approach in 1993 at 42 U.S.C. § 1396p(d)(4)(B). The subparagraph lifts the Medicaid trust rules from such a trust only when all three of its conditions are met, and the third condition is the one that decides whether the trust is any use where you live:1

1. Income only. The trust is composed only of pension, Social Security, and other income to the individual, and income accumulated in the trust. It cannot hold assets such as savings accounts or investments.1
2. The state is repaid at death. The state receives all amounts remaining in the trust when the individual dies, up to the total medical assistance paid on that person's behalf under the state plan.1
3. The state has to be an income-cap state. The subparagraph applies only where the state makes medical assistance available to the special income level group under section 1396a(a)(10)(A)(ii)(V) and does not make it available for nursing facility services under section 1396a(a)(10)(C), the medically needy pathway. Where the state does cover nursing facility services that way, this subparagraph does not reach the trust at all.1

Arizona, whose ALTCS rules this page states for the month-to-month mechanics, does not count income deposited in a qualifying trust as income when it decides eligibility, but does count it in figuring the person's share of cost toward their care.3

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. The month-to-month rules are the state's own, and the ones stated here are Arizona's, published by its ALTCS program for the Income-Only Trust, with Texas's rules noted where they add detail. Each month the mechanics go like this:3

1. Income comes in. The applicant's Social Security, pension, and other income is deposited into the trust account in the month it is received. Only the person's own income can go in: resources and savings cannot be added to the account or used to fund it.3 How much of the income has to flow through is set by your state's rules. Texas, for one, lets a trust take any or all of a person's income sources but requires each source it takes to be deposited in full, so confirm your state's rule with its Medicaid agency before the first deposit.2
2. The trust pays out. Money leaves the trust only for the person's benefit and the purposes state law specifies. Texas requires its trust document to direct the trustee to pay the person a monthly personal needs allowance, court-ordered guardianship fees, and enough to give an at-home spouse a minimum monthly maintenance needs allowance, and gives the trustee until the last day of the following month to distribute each month's income.2 What Medicaid lets a resident keep before the rest of their income goes toward care includes:
   • The applicant's personal needs allowance, the small monthly amount kept for personal expenses. Federal law sets a floor of $30 a month for an institutionalized individual who is aged, blind, or disabled, and $60 for an institutionalized couple where both spouses are aged, blind, or disabled and their incomes are considered available to each other; a state may set it higher. In Texas it is $75 for someone living in a nursing facility, and the amount changes with the setting, $85 in assisted living or foster care and $2,901 for someone receiving HCBS waiver services.7,8
   • Medicare and other health-insurance premiums, deductibles, coinsurance, and other incurred medical expenses no third party will pay.7
   • 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, plus a maintenance allowance for other family at home. If a fair hearing finds the at-home spouse needs more income because of exceptional circumstances causing significant financial duress, it can substitute an amount adequate to provide it.9,7
   • The applicant's share of cost to the nursing facility or home-care provider, the amount the applicant contributes each month. Income in the trust still counts toward it, and in Texas the co-payment is figured on the person's total income, including income not put in the trust.3,2
3. The trustee disburses monthly. Arizona has the trustee make the appropriate monthly disbursements based on the income assigned to the trust, and money taken out can only be used for the person's benefit and for the purposes state law specifies.3

The trustee keeps every bank statement and distribution record. Arizona also requires the trustee to tell the local ALTCS office about any change in trust income or anticipated payments 45 calendar days in advance, or within 30 calendar days for an emergency trust payment, and warns that missing this can affect eligibility and share of cost.3

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, meaning one that does not make Medicaid available for nursing facility services through the medically needy pathway. Texas and Arizona are examples. If your state does run that pathway, the federal subparagraph does not apply and a Miller Trust is not your route.1,2
• Your income exceeds the state's Medicaid institutional income limit, the figure your own state publishes. In 2026 that's $2,982 per month for an individual in Texas and Washington and $3,002 in Idaho.5,8
• You are applying for nursing-facility Medicaid or a Medicaid HCBS waiver. Miller Trusts are for long-term-care Medicaid: in Texas, income directed into the trust is not disregarded for SSI or for non-institutional programs such as the Medicare Savings Programs.2
• Your countable assets are already at or below the state's resource limit, which in Texas is $2,000 for a single applicant, the same as the SSI limit. A Miller Trust does not address the resource test.8,5,2

A Miller Trust is not your route if your state covers nursing facility services through the medically needy pathway, and you do not need one if your income is already at or under your state's limit.1

Setting One Up

A Miller Trust is easy to get wrong. The trust has to hold only the person's own income, name the state Medicaid agency as a remainder beneficiary, and disburse only for the person's benefit and for the purposes state law specifies, so it is worth having an elder-law attorney draft it.3

States add their own drafting rules. Texas requires the trust to be irrevocable, recommends that the person not serve as their own trustee, and requires income to be deposited the same month it is received. Where a qualifying trust was already in place, Texas can start the income disregard up to three months before the application file date if every other requirement is met. Check your state's exact timing rule, because income that misses the trust can cost you that month of benefits.2

Common Mistakes

Depositing the wrong money. Only the person's own income belongs in the trust. Texas says that if resources are placed in it, it is not a QIT.3,2

Paying the person's rent or handing them cash. Arizona counts money given directly to the customer, and money paid from the trust for the customer's shelter, as income in determining eligibility, which undoes the one thing the trust was set up to do.3 Ask your own state Medicaid agency what its trust may and may not pay for before the trustee writes the first check.

Letting the balance grow. The trust is not a savings vehicle: the trustee makes monthly disbursements based on the income assigned to the trust, and whatever is left when the person dies goes to the state, up to what Medicaid paid.3

Treating any trust as a Miller Trust. The trust has to meet the federal conditions, income only and the state repaid at death, in a state where the subparagraph applies. Texas adds that it must be irrevocable.1,2

Missing your state's timing rule. In Texas, income not put into the trust in the month it is received counts that month, and if it pushes countable income over the limit the person is income-ineligible for that month. A trustee who does not distribute the income by the end of the following month has made a transfer of assets. Confirm the deposit deadline with your state Medicaid agency before you file.2

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:1,4

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: it cannot hold resources, and it does not address the resource test.1,2

"I can keep whatever is in the trust when I die." You cannot. Federal law requires the state to receive everything left in the trust, up to the amount Medicaid paid for the applicant's care, before any family member inherits anything.1

"My spouse's income has to go in the trust too." It does not. Only the person's own income goes into the trust.3

"The trust saves me money." Not directly. Income in the trust still counts toward the person's share of cost, so it goes to care either way. What the trust does is make Medicaid eligibility possible, against a nursing home bill that runs $114,975 a year for a semi-private room at the national median.3,6

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, a special income level the state sets in its own plan. Federal matching funds for that group stop at 300% of the individual SSI benefit rate, but the figure a state publishes can differ from it. Over-income applicants in these states can use a Miller Trust to meet the income test.5,1
• Medically needy state: A state that covers nursing facility services through the medically needy pathway, where applicants become eligible by incurring medical expenses equal to their excess income. The Miller Trust subparagraph does not apply there.4,1
• Personal Needs Allowance (PNA): The portion of income the applicant keeps each month for personal expenses; a federal floor of $30 a month for a nursing-facility resident that a state may set higher ($75 in Texas for a nursing facility resident, $85 in assisted living or foster care, $2,901 on an HCBS waiver).7,8
• 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, or the amount a fair hearing finds necessary where exceptional circumstances cause significant financial duress.9
• Medicaid spend-down: The alternative pathway used in medically needy states.4
• HCBS waiver: A Miller Trust is used for HCBS waivers in income-cap states, not just nursing-home Medicaid. It solves the income test only.2 Clearing the special income level is not by itself a route into a waiver: federal rules let a state cover a home- and community-based waiver group only where the person would be eligible for Medicaid if institutionalized, would otherwise require the level of care a hospital, nursing facility, or ICF/IID furnishes, and actually receives the waivered services.5

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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.