What is a Miller Trust?

Texas is one of 12 states that have an income cap to qualify for Medicaid long-term care. That means some people who need nursing home care have too much monthly income to qualify for Medicaid, but still not enough to pay the full cost of care. A Miller Trust, also called a Qualified Income Trust, can bridge that gap by routing the applicant’s income through a special trust so the person meets Medicaid’s income rules.

Who Must Meet the Income Cap

ITo qualify for Texas Medicaid nursing home benefits, an applicant must have a medical need for skilled nursing care and countable resources under $2,000. The person’s gross monthly income must also be under the income cap. For 2025, the income cap is $2,901. This figure changes from year to year. The American Council on Aging’s website tracks current income and asset limits for eligibility. If a person’s gross income exceeds the cap and no Miller Trust is in place, they may not qualify for coverage.

Why Miller Trusts Exist

The income cap results in a situation where many people who need nursing home care receive too much income to qualify for Medicaid but earn too little to afford the high cost of nursing home care. To solve this problem, the Omnibus Budget Reconciliation Act of 1983 allows people in income-cap states to qualify by placing their monthly income into a trust. The trust does not shelter assets. It simply allows the income not to disqualify the applicant who wants to qualify for Medicaid.

What are the Requirements of a Miller Trust?

A valid Miller trust meets the following requirements to work. It should:

• Be irrevocable;
• Funded only with the applicant’s income, such as a pension, or Social Security;
• State that, upon the beneficiary’s death, the State of Texas will be repaid from remaining trust funds up to the total Medicaid benefits paid.

Who Can Be the Trustee of a Miller Trust?

Anyone other than the Medicaid applicant can be the trustee. For example, a sibling, an adult child, or an agent under a durable power of attorney can be the Trustee.

How Miller Trust Work?

A Miller Trust can only hold the applicant’s income. You should not transfer any other resources to the trust. Every month, after the income is deposited in the trust, the Trustee of the Miller Trust will make certain distributions:

1. Personal Needs Allowance. Under current law, the personal needs allowance is $60. The Trustee should distribute this amount to the beneficiary once each month.
2. Spousal Maintenance. If the beneficiary has a spouse, the trustee can distribute a monthly maintenance needs allowance to the spouse. In 2025, the allowance is $$3,948.00. Like the income cap, the allowance varies year to year.
3. Medical Payments. The Trustee must pay uncovered medical expenses and the cost of long-term care from the trust by the end of each month.

After the nursing home is paid, the trust’s checking balance should be close to zero. If a small amount remains, it must stay in the trust and will be paid to the State of Texas after the beneficiary’s death, up to the total Medicaid benefits paid.

An attorney can help you decide whether a Miller Trust is the right solution for your family, draft a trust that complies with Medicaid rules, and advise you on how to properly administer the trust.

This article was originally written on February 10, 2021 and updated on July 9, 2025.