Miller trust is a phrase most families hear for the first time in a hallway, from a billing clerk, on a bad day. Your parent needs nursing home care. You filed the Medicaid application. Then someone told you the income is a few hundred dollars too high. That does not mean your parent can afford the bill. Nursing home care usually costs several times a Social Security check. It means your parent lives in a state that uses a hard income cap.
In those states, one dollar over the line is a denial, not a discount. A miller trust exists to answer that exact problem. This guide walks through the process. It does not promise a result.
What Miller Trust Actually Means
A miller trust is a bank account controlled by a short written trust document. Its formal name in federal law is a qualified income trust, or QIT. Congress authorized it in section 1917(d)(4)(B) of the Social Security Act. The name “Miller” comes from an old Colorado court case, not from a statute.
Here is the mechanics in one sentence. Income that would otherwise disqualify your parent is deposited into the trust each month, and the state stops counting that deposited income when it tests income eligibility.
The federal anchor for 2026 is this. Income-cap states may set the special income level at up to 300% of the SSI federal benefit rate. SSA set the 2026 federal benefit rate at $994 per month for an individual, effective January 1, 2026.
That puts the 2026 federal ceiling at $2,982 per month for an individual. You can read the SSA figure here.
SSA: SSI Federal Payment Amounts for 2026
Not every state uses an income cap, and the caps that exist are not identical. Your state’s figure is on its state guide. Confirm it with your state Medicaid agency before you assume anything.
What Usually Happens Next
Step one is finding out whether your state even uses a miller trust. States that do not use an income cap generally use a “spend-down” or “medically needy” pathway instead. Ask the state Medicaid office directly. Do not guess from a national article, including this one.
Step two is the application itself. Federal rules at 42 CFR 435.912 require the state to decide most applications within 45 days. That stretches to 90 days when a disability determination is required.
eCFR: 42 CFR Part 435, Medicaid Eligibility
Step three is drafting. Most income-cap states publish a required or model trust document. The state must approve the language. A trust that omits the required Medicaid payback clause is usually rejected.
Step four is the bank account and the tax ID. Many banks ask for an employer identification number before opening a trust account. That comes from IRS Form SS-4, filed by the trustee.
IRS: About Form SS-4, Application for Employer Identification Number
Step five is the monthly routine, and it is the part families underestimate. The deposit must happen every month, in the correct month. Then the trustee pays out in the order the state requires.
What Counts and What Does Not
The table below is a general map of how income and assets are usually treated. Treatment varies by state and by program. Verify each line with your state Medicaid agency.
| Item | Counts toward the income cap? | Note |
|---|---|---|
| Social Security retirement benefit | Yes | The most common reason a miller trust is needed at all. |
| Pension or annuity payment | Yes | Often the dollars that push a parent over the cap. |
| VA pension or compensation | Usually yes, with exceptions | Aid and Attendance is treated differently in some states. Ask. |
| Wages of a working spouse | Generally no | Spousal impoverishment rules protect a community spouse separately. |
| Savings, CDs, a second car | No, these are assets | A miller trust fixes income only. It never fixes an asset problem. |
| The family home | Asset test, not income | Often exempt while a spouse lives there. Estate recovery may apply later. |
| Money already in the trust | Not counted as income | Only if deposited correctly and spent under the state’s payout rules. |
Two federal points belong beside that table. A nursing home resident keeps a small personal needs allowance each month, and federal law sets only the floor. States set their own higher amounts, and yours is on its state guide.
Second, most of the money in the trust does not stay there. It generally flows out to the personal needs allowance, then to health insurance premiums, then to the facility. Whatever remains at death goes to the state under Medicaid estate recovery.
Common Mistakes
Mistake one: treating a miller trust as a savings account. Fix: understand that the balance is spent down monthly under state rules, and the state has a claim on what is left.
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Mistake two: depositing late, or skipping a month during a hospital stay. Fix: put the transfer on autopay and calendar a check on the same day each month.
Mistake three: assuming a miller trust also solves excess assets. Fix: handle the asset test separately, and never move or gift assets before asking about the five-year look-back period.
Mistake four: using a template found online instead of the state’s own document. Fix: request the state’s model language from the Medicaid office before anyone drafts anything.
Mistake five: missing the appeal window after a denial. Fix: read the notice the day it arrives, because federal rules at 42 CFR 431.221 let states set a hearing deadline as short as 20 days from the notice date.
What to Do This Week
First, gather documents. Pull twelve months of bank statements, the Social Security award letter, every pension statement, insurance cards, and the deed if there is a house. Put them in one folder. Nothing moves without them.
Second, call free help before you call anyone who charges. Your SHIP counselor handles Medicare questions at no cost, and the Area Agency on Aging can point you to local legal aid for the Medicaid side.
Eldercare Locator: Find your Area Agency on Aging
Third, ask the state Medicaid office three questions in writing. Does this state use an income cap? Is a qualified income trust required here? Where is the approved trust document?
Medicaid.gov: Where to get help with Medicaid
Then check your state’s guide on this site for the income cap, the asset limit, the personal needs allowance and the penalty divisor that apply where your parent lives.
Miller Trust: Frequently Asked Questions
Does a miller trust let my parent keep the money?
Generally no. The trust holds income briefly, then pays it out under the state’s required order each month. Any balance remaining at death is subject to Medicaid estate recovery. Ask your state what its payout order is.
Can I set one up without a lawyer?
Some families do, using the state’s own model document. Others use legal aid or an elder law attorney. This page describes the process and is not legal advice. If cost is the barrier, start with the Area Agency on Aging referral to legal aid.
What is the income limit in my state for 2026?
The federal ceiling for the special income level is 300% of the SSI federal benefit rate, which is $2,982 per month for an individual in 2026. States may set a lower figure, and some use no cap at all. Confirm your state’s number with the state Medicaid agency.
Will this affect my parent’s Medicare?
Medicare eligibility is separate and is not changed by a trust. Medicare also covers only limited skilled nursing facility care after a qualifying hospital stay, not long-term custodial care. The two programs run on different rules.
Medicare.gov: Skilled nursing facility (SNF) care
Key Takeaways: Miller Trust
- The state decides, not the facility. Whatever a billing office says about miller trust, eligibility is decided by the Medicaid agency.
- The federal figure is the floor. Every miller trust number on this page has a state version, and the state version wins.
Where to Get Free Help
Nobody has to work through miller trust alone or pay anyone to start. The Eldercare Locator at eldercare.acl.gov connects you to your county’s Area Agency on Aging, legal aid handles Medicaid questions at no charge, and your state’s guide on this site has the current figures and the office that decides.
Official Sources & Resources
- Medicaid.gov — eligibility: https://www.medicaid.gov/medicaid/eligibility/index.html
- Eldercare Locator (ACL): https://eldercare.acl.gov
- Medicare.gov: https://www.medicare.gov
- CMS.gov: https://www.cms.gov
- Find your SHIP counselor: https://www.medicare.gov/talk-to-someone
Checked against the official sources above in September 2026. Rules and dollar figures change; if a notice you received disagrees with this page, the notice wins — and please tell us. General information, not legal, financial or medical advice.