Miller Trust Kentucky: Qualified Income Trust for Medicaid

When Your Parent Makes Too Much for Medicaid but Not Enough for Private Pay

Kentucky is an "income cap" state for long-term care Medicaid. The monthly gross income limit for nursing home Medicaid and the Home and Community Based (HCB) Waiver is $2,982 per month in 2026, set at 300% of the Federal Benefit Rate. If your parent's income exceeds this cap by even one dollar, they are technically ineligible — regardless of how modest the income actually is relative to the $9,895.72 average monthly cost of a Kentucky nursing facility.

A Qualified Income Trust, commonly called a Miller Trust, solves this problem. It is a legal mechanism that routes the excess income into a separate, irrevocable trust bank account each month. The funds in the trust are excluded from the Medicaid eligibility calculation.

How the Trust Works

The trust does not shelter money from the nursing facility. Here is the monthly flow:

1. Your parent's income exceeding $2,982 is deposited into the QIT bank account each month
2. From the trust, the following amounts are distributed:
   • $60 Personal Needs Allowance — returned to your parent for personal expenses
   • Health insurance premiums (Medicare Part B, Medigap, prescription drug plan)
   • Community Spouse Income Allowance — if applicable, income diverted to a spouse living at home to meet the Minimum Monthly Maintenance Needs Allowance ($2,643.75 in the first half of 2026, rising to $2,705.00 on July 1)
3. The remaining balance goes to the nursing facility as "patient liability"
4. At the end of each month, the trust account should have a zero or near-zero balance

The trust is irrevocable — once established, it cannot be modified or dissolved while your parent is on Medicaid. Upon the beneficiary's death, any remaining funds in the trust must be paid to the Kentucky Department for Medicaid Services to reimburse the cost of care.

Setting Up the QIT in Kentucky

Kentucky uses Form MAP-007 as the official Qualified Income Trust template. The form is available through the Department for Medicaid Services and specifies the exact trust language the state requires.

The practical steps:

1. Download MAP-007 from the CHFS Department for Medicaid Services
2. Open a dedicated bank account — this account can only receive the beneficiary's income. No other deposits are permitted.
3. Complete the trust document using the MAP-007 template language. The trustee (often an adult child or other authorized representative) manages the account.
4. Submit the executed trust with the Medicaid long-term care application (Form MAP-1) through kynect or your local Department for Community Based Services (DCBS) office

An elder law attorney can draft the trust, but the MAP-007 form provides state-approved language that many families use directly. If your parent's financial situation is straightforward — their only income is Social Security plus a small pension, no real estate transfers in the past five years — the trust setup is mechanical rather than strategic.

Application Timeline

The Medicaid application itself typically takes 45 to 90 days to process in Kentucky. During this period, your parent is in "Medicaid-pending" status at the nursing facility. The facility should not discharge a resident for non-payment during this window, provided the family is cooperating with DCBS and submitting all requested financial documentation.

Two timing points families miss:

• File early. If your parent is in rehab under Medicare and the transition to long-term custodial care is foreseeable, file the Medicaid application while they are still in the Medicare-covered window. This avoids a gap.
• The QIT must be funded in every month you are claiming eligibility. If you miss a monthly deposit, that month's Medicaid coverage can be retroactively denied.

The Alternative: Medically Needy Spend-Down

If a family does not establish a QIT, the alternative pathway is the Medically Needy Spend-down program. But this route has a much harsher income threshold — $235 per month for an individual. The applicant must prove they incur medical expenses sufficient to reduce their effective income to that floor. For most families, the QIT is dramatically more practical.

The Kentucky Hospital-to-Home Transition Guide includes a Medicaid financial worksheet that calculates whether your parent needs a QIT, step-by-step instructions for completing MAP-007, and a monthly patient liability calculator to project what the nursing facility will receive each month.

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