Qualified Income Trusts (Miller Trusts)
What Are Miller Trusts and Why Are They Crucial for Medicaid Eligibility?
Miller Trusts—also known as Qualified Income Trusts—offer a legal path for individuals whose income exceeds Medicaid’s limits to still qualify for long-term care assistance. By placing excess income into a trust, that income is no longer counted against Medicaid eligibility thresholds.
What Other Names Might You Hear for a Miller Trust?
Depending on the state, these trusts might be referred to as Qualifying Income Trusts (QITs), Income Diversion Trusts, Income Cap Trusts, Income-Only Trusts, or Irrevocable Income Trusts. For example, Arizona uses the term “Income-Only Trust,” while Oregon calls it an “Income Cap Trust.” Though the names vary, the purpose and structure remain essentially the same.
What About Pooled Income Trusts—How Are They Different?
Pooled Income Trusts serve a similar function for disabled individuals, helping them qualify for Medicaid when income is too high. Managed by nonprofit organizations, these trusts combine the income of many individuals into a shared fund. They are less commonly used and only allowed in certain states, such as New York and Connecticut, which do not allow Miller Trusts.
What’s the Difference Between Medically Needy and Categorically Needy States?
Understanding your state’s Medicaid structure is essential. In “Medically Needy” or “Spend Down” states, applicants can deduct medical expenses from their income to become eligible. In contrast, “Categorically Needy” or “Income Cap” states don’t allow this approach, making Miller Trusts vital for those whose income exceeds the limit.
How Much Income Is Too Much in an Income Cap State?
In 2025, the income cap in these states is typically 300% of the Federal Benefit Rate (FBR), which equals $2,901 per month for an individual. By placing income above this threshold into a Miller Trust, applicants can meet eligibility requirements.
How Exactly Does a Miller Trust Work?
The Medicaid applicant sets up a legal trust account and channels their “excess” income into it. This income is no longer counted by Medicaid, which clears the path to eligibility. The trust must be irrevocable and name the state as the beneficiary for any remaining funds upon the recipient’s death.
Who Can Establish and Manage a Miller Trust?
The trust can be set up by the applicant, their legal guardian, or someone holding power of attorney. A trustee—often a relative—must be appointed to oversee the trust. Importantly, the Medicaid recipient cannot be their own trustee.
What Income Must Be Deposited?
Rules vary by state. Some require all income to go into the trust, while others allow partial deposits. However, full payments from a single income source (like a Social Security check) must be entirely deposited if included.
Do Miller Trusts Help With Medicaid’s Asset Limits?
No. Miller Trusts only address income issues. Assets cannot be deposited. To meet asset limits, other strategies—such as Medicaid Asset Protection Trusts—should be considered.
What Can Trust Funds Be Used For?
Money in a Miller Trust can only be used for approved expenses. These include:
- A Personal Needs Allowance (PNA), which varies by state—for example, $105.78/month in Washington (2025), $160 in Florida, and $75 in Texas.
- A Monthly Maintenance Needs Allowance for a non-applicant spouse, up to $3,948/month (2025).
- Share of cost toward long-term care services, unpaid medical bills, and Medicare premiums.
Does the Trust Benefit the Medicaid Recipient’s Family?
No. Funds do not go to the recipient or their heirs. Any remaining balance after death goes to the state, up to the amount Medicaid spent on care.
What Happens to the Trust Money After Death?
After the Medicaid recipient passes away, the state—named as the primary beneficiary—receives any remaining funds to reimburse long-term care costs. The amount recovered cannot exceed what the state paid.
Is There a Limit to How Much Income You Can Deposit?
Some states set caps. For instance:
- Oklahoma: $7,535/month
- Iowa: $11,713.75/month
- Arizona: $8,201.34/month (certain counties)
Other states have no official limit, but the practical cap is the cost of nursing home care or the allowable spousal income allowance, if applicable.
Which States Permit the Use of Miller Trusts?
As of July 2025, 25 states allow Miller Trusts to meet Medicaid’s income limit:
| State | Maximum Monthly Income (if applicable) |
|---|---|
| Alabama | No Limit |
| Alaska | No Limit |
| Arizona | $8,201.34 / $7,752.73 |
| Arkansas | No Limit |
| Colorado | Varies by region* |
| Delaware | No Limit |
| Florida | No Limit |
| Georgia | No Limit |
| Idaho | No Limit |
| Indiana | No Limit |
| Iowa | $11,713.75 |
| Kentucky | No Limit |
| Mississippi | No Limit |
| Missouri (HCBS Only) | No Limit |
| Nevada | No Limit |
| New Jersey | No Limit |
| New Mexico | No Limit |
| Ohio | No Limit |
| Oklahoma | $7,535 |
| Oregon | No Limit |
| South Carolina | No Limit |
| South Dakota | No Limit |
| Tennessee | No Limit |
| Texas | No Limit |
| Wyoming | No Limit |
*Colorado income caps range from $9,290.77 to $11,566.20 depending on county.
Should You Get Professional Help When Setting Up a Miller Trust?
Though it’s not mandatory, professional help is strongly advised. Errors in drafting or funding the trust can disqualify an applicant. Medicaid planners can also assist with spousal income allowances and asset strategies.
How Much Does It Cost to Set Up a Miller Trust?
The cost of establishing a Miller Trust generally falls between $400 and $500, though more complex cases may cost up to $2,000. Many professionals include this as part of broader Medicaid planning services, making it a cost-effective investment given the potential for long-term savings.
