Qualified Income (Miller) Trusts

In many states, a person whose monthly income is even one dollar over the Long-Term Care Medicaid income cap cannot qualify, no matter how high their care costs are, unless they use a special trust. That trust is called a Qualified Income Trust (QIT), and it is widely known as a Miller trust, after a 1990 federal court case. This guide explains when a Miller trust is needed, how it works month by month, and the mistakes that cause problems.

Figures change periodically. Double-check current amounts before relying on them.

The short version

A Miller trust is needed in states that use a hard income cap for Long-Term Care Medicaid and do not let people “spend down” excess income on medical bills. In 2026 the cap in most of these states is $2,982 a month (300 percent of the $994 federal SSI benefit).
Income over the cap is deposited each month into a bank account owned by the trust. Income placed in the trust does not count toward the cap.
The money in the trust is then paid out each month, mostly toward the cost of care. A Miller trust does not protect income for the family; it simply makes eligibility possible.
When the person dies, any money left in the trust goes to the state, up to the amount Medicaid paid for their care.
An attorney usually prepares the trust document. Some states publish a model form.

Why Miller trusts exist

Federal law lets states choose how to treat income for Long-Term Care Medicaid. Roughly speaking, states fall into two groups:

Income cap states set a fixed limit, usually 300 percent of the SSI benefit ($2,982 a month in 2026). Someone over the cap is not eligible on income.
Medically needy states have no fixed cap for nursing home care. If the person’s income is less than the cost of care, they can qualify and pay most of their income toward care. See The medically needy pathway.

In income cap states, a person with $3,200 a month in Social Security and a pension, facing a nursing home bill of $10,000 a month, would be shut out entirely. Congress fixed this problem in 1993. Federal law (Social Security Act section 1917(d)(4)(B), 42 U.S.C. 1396p(d)(4)(B)) allows a trust made up only of the person’s pension, Social Security and other income, with the state named to receive what is left at death. Income placed in such a trust is disregarded for the income test. Each state guide says whether that state uses an income cap and whether a Miller trust is needed.

How a Miller trust works, step by step

The trust is signed. The person who needs care (or their agent under a power of attorney, or a guardian) signs an irrevocable trust document. A trustee is named, often a family member.
A bank account is opened in the name of the trust. It should hold only trust money.
Income is deposited each month. At least enough income to bring the person under the cap must go into the trust account each month. Many families deposit an entire income source, such as a pension check, to keep it simple. Some states require that the deposit happen in the same month the income is received.
The trustee pays out the money each month according to the state’s rules. Typically, payments go in this order:
the personal needs allowance for the resident (see Personal needs allowance);
an allowance for a spouse at home, if any (see MMMNA);
health insurance premiums, such as Medicare supplement or Part D premiums;
in some states, a small trustee or bank fee;
the rest to the nursing home or care provider as the person’s share of cost (the patient liability).
The account is kept close to empty. Money should not build up in the trust.
At death, the trustee pays any balance to the state Medicaid agency, up to the total Medicaid paid.

An example (2026 figures)

Dorothy lives in an income cap state with a $2,982 cap. She has $2,400 a month in Social Security and a $900 pension, for a total of $3,300. That is $318 over the cap.

Her family sets up a Miller trust. Each month her $900 pension is deposited into the trust account.
Her countable income outside the trust is now $2,400, under the cap.
She meets the other rules and is approved for nursing home Medicaid.
Each month, her $3,300 in total income (the $2,400 outside the trust plus the $900 inside it) is used for her personal needs allowance and her health insurance premium, with the rest paid to the nursing home. Medicaid pays the balance of the bill.

The trust did not save Dorothy any money. It made her eligible, so that Medicaid covers the large gap between her income and the cost of her care.

What a Miller trust can and cannot hold

It can hold only income: Social Security, pensions, annuity payments and similar monthly income.
It should not hold savings, the proceeds of selling a home, or other assets. Putting assets in a Miller trust can break the trust’s protection and cause other problems.
It does not help with an asset problem. An applicant must still meet the asset limit separately.

Common mistakes

Missing a monthly deposit. In many states, a month with no deposit (or too small a deposit) is a month the person is over the income limit, and Medicaid may not pay for that month.
Depositing the wrong amount. The deposit must be enough to bring countable income under the cap. If income rises, for example after a cost-of-living increase each January, the deposit may need to rise too.
Letting money pile up. Funds left in the trust after the monthly payments can cause questions or problems at renewal.
Mixing funds. Using the trust account for other purposes, or paying family members out of it.
Using the wrong form. Some states require specific wording. A trust that does not meet the state’s rules can be rejected.
Not telling the caseworker. The trust must be disclosed with the application, with a copy of the document and bank statements.

Who can be trustee?

Usually any responsible adult, often an adult child. Some states do not allow the applicant to be their own trustee. The trustee must keep records of every deposit and payment and may need to provide statements at renewal. Trustees generally are not paid, or are paid only a small fee if the state allows it.

Home and community-based care

Miller trusts are not only for nursing homes. In many income cap states, the same cap applies to waiver programs that pay for care at home or in assisted living, and a Miller trust can be used for them too. The payment order is different, because a person living at home needs more income to pay rent and food. The state’s rules decide how much the person can keep for living costs.

Is a Miller trust a “loophole”?

No. It is a mechanism expressly written into federal law so that people with modest incomes just over the cap are not denied care they cannot otherwise afford. All income still goes toward care, and the state is repaid from any leftover funds.

When to get help

Setting up a Miller trust is usually simpler than other planning, but timing matters. If a trust is not in place and funded in a month, that month may not be covered. A Certified Medicaid Planner can work out the right deposit amount, coordinate with the other parts of the application and help the trustee get the monthly routine right. An attorney prepares the trust document where the state does not supply a form.

Frequently asked questions

Does every state use Miller trusts? No. Only states with a hard income cap for Long-Term Care Medicaid. Medically needy states generally do not need them. The state guides say which applies.

Can the trust be set up after the person enters a nursing home? Yes. It is common to set one up when the need arises. Coverage generally starts with the first month the trust is properly funded and all other rules are met.

Does income in the trust still go to the nursing home? Yes, most of it, after the allowed deductions.

What happens if the person leaves Medicaid or dies? The trust usually ends. The trustee repays the state from any balance, up to what Medicaid paid, before anything else is distributed.

Can a spouse at home benefit from the trust? Indirectly. If the spouse at home qualifies for a monthly allowance, the trustee can pay it from the trust.

Key terms

Income cap state: a state that sets a fixed monthly income limit for Long-Term Care Medicaid, usually 300 percent of the federal SSI benefit.
Qualified Income Trust (QIT): the formal name for a Miller trust under federal law.
Trustee: the person who manages the trust account and makes the monthly payments.
Patient liability (share of cost): the part of the resident’s income paid to the nursing home each month.
Remainder: the money left in the trust at death, which goes to the state up to what Medicaid paid.

A monthly checklist for trustees

Confirm the income deposit arrived in the trust account in the right amount.
Pay the allowed deductions (personal needs allowance, spousal allowance, insurance premiums) as the state’s notice directs.
Pay the nursing home or care provider its share of cost.
Keep the bank statement and a short note of every payment.
Watch for income changes, such as the January cost-of-living adjustment, and adjust the deposit if needed.

Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.