Miller Trust in Arkansas: How to Qualify for Medicaid When You're Over the Income Limit

Your parent's Social Security check plus their pension pushes them a few hundred dollars over the Arkansas Medicaid income limit. The DHS caseworker says they don't qualify. You're staring at $26 per hour for private-duty home care — roughly $4,550 a month — with no end in sight.

Arkansas is an "income cap" state. If your parent's gross monthly income exceeds $2,982 by even one dollar, they're automatically disqualified from the ARChoices in Homecare waiver. But there's a standard, completely legal tool that solves this: a Qualified Income Trust, commonly called a Miller Trust.

What a Miller Trust Actually Does

A Miller Trust is an irrevocable trust with a dedicated bank account. Each month, your parent's income that exceeds the $2,982 Medicaid limit — or in many cases, their entire monthly income — gets deposited into this account. Once the income passes through the trust, it's no longer counted against the Medicaid eligibility threshold.

The trust must be irrevocable, meaning it can't be revoked or changed once it's established. You (or another adult child) serve as the trustee, managing the account and making approved disbursements.

The funds inside a Miller Trust can only be used for state-approved expenses:

• The Medicaid-approved personal needs allowance
• Health insurance premiums (Medicare Part B, Medigap, Part D)
• Court-approved spousal support payments (the Monthly Maintenance Needs Allowance)

When the Medicaid beneficiary passes away, any remaining funds in the Miller Trust must be paid directly to the State of Arkansas up to the total amount of Medicaid benefits the state provided. This is a requirement — the trust document must include this payback provision or DHS will reject it.

How to Set Up a Miller Trust in Arkansas

Step 1: Draft the trust document. The trust must be irrevocable and name the Medicaid applicant as the sole beneficiary during their lifetime. It must include the state payback clause. While templates exist, many families hire an elder law attorney for this step — a straightforward Miller Trust typically costs $500 to $1,500 to draft, far less than full Medicaid planning.

Step 2: Open a dedicated bank account. Take the signed trust document to a local bank and open a checking account titled in the name of the trust (for example, "Miller Trust for [Parent's Name]"). This account must be completely separate from all other accounts.

Step 3: Set up monthly deposits. Each month, the applicant's income must flow through the Miller Trust account. Many families set up automatic transfers from the parent's Social Security or pension direct deposits. The key: the income must actually pass through the trust account before any of it is spent.

Step 4: Submit with the Medicaid application. When you file Form DCO-0004 (the combined healthcare application) with your local DHS Division of County Operations office, include a copy of the executed Miller Trust document and the trust bank account statements.

Who Needs a Miller Trust — and Who Doesn't

The 2026 Arkansas Medicaid income limit for long-term care services is $2,982 per month gross. That's exactly 300% of the Federal Benefit Rate. If your parent's combined income from Social Security, pensions, annuities, and any other sources stays below this number, they don't need a Miller Trust.

If they're over by any amount — $50 or $500 — they do.

For married couples, only the applicant spouse's income counts against the limit when one spouse is applying. The community (non-applicant) spouse's income is not counted. However, if the community spouse's own income is below $2,705 per month (the 2026 minimum Monthly Maintenance Needs Allowance), they can receive a portion of the applicant's income to bring them up to that level.

Common Miller Trust Mistakes

Mixing trust funds with personal accounts. The Miller Trust bank account must remain completely separate. Commingling funds — depositing personal money or paying personal bills from the trust account — can void the trust's legal status and trigger a Medicaid denial.

Forgetting to deposit income every month. Even after your parent is approved for ARChoices, the monthly deposits must continue for as long as they receive Medicaid benefits. Missing a month can jeopardize ongoing eligibility.

Not including the state payback clause. Arkansas DHS will reject a Miller Trust that doesn't explicitly state that remaining funds revert to the state upon the beneficiary's death. This is non-negotiable.

Trying to shelter excess income. A Miller Trust is not an asset protection strategy. It's a legal mechanism that allows income to pass through to approved expenses while satisfying Medicaid's income-cap rule. Attempting to use it to hide or redirect funds is fraud.

The Arkansas Home Care Navigation Guide includes a step-by-step Miller Trust setup walkthrough with bank account instructions and a tracking template for monthly deposits — everything you need to handle a straightforward over-income case without paying thousands for a full Medicaid planning package.

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