Miller Trust Texas: How a Qualified Income Trust Works for Medicaid Eligibility

Texas is an "income cap" state for Medicaid long-term care. If your parent's gross monthly income exceeds $2,982 (2026 limit), they're automatically disqualified from nursing home Medicaid and STAR+PLUS HCBS services — even if they have almost no assets and desperately need care.

A Qualified Income Trust, commonly called a Miller Trust, is the legal mechanism that fixes this. It doesn't hide income or reduce it. It redirects specific income streams through an irrevocable trust so they're excluded from the eligibility calculation.

How It Works

The Miller Trust is a separate bank account with a specific legal structure:

1. The trust instrument — a legal document that creates the trust, names a trustee (cannot be the applicant), and designates the State of Texas as the primary residuary beneficiary
2. A dedicated bank account — opened under the trust's name using the beneficiary's Social Security number
3. Monthly income deposits — the entire amount of one or more income sources (Social Security, pension) is deposited into the trust account each month

The trust becomes effective the first month all three elements are in place: the instrument is signed and notarized, the bank account is open, and the first deposit lands.

The Rigid Monthly Rules

This is where families make costly mistakes. The Miller Trust has strict monthly deposit and disbursement requirements that cannot be fudged:

Deposits

• The entire amount of the chosen income source must be deposited — not a partial amount. If Social Security pays $1,800/month, the full $1,800 goes into the QIT account.
• The deposit must occur during the exact calendar month the income is received.
• Missing a single month's deposit invalidates the trust for that month, exposing the family to the full private-pay rate.

Disbursements (in strict priority order)

All funds must be distributed by the last day of the month following receipt:

1. $75 personal needs allowance — the institutionalized parent's monthly spending money
2. Spousal maintenance allowance (MMNA) — if there's an at-home spouse, their income support ($2,705–$4,066.50 range)
3. Medicare premiums and other allowable health insurance costs
4. Applied income (co-payment) — the remainder goes directly to the nursing facility or care provider

Bank service fees and trust administration costs cannot be deducted from the amount used to calculate the parent's co-payment.

Who Serves as Trustee

The Medicaid applicant (the parent) cannot serve as their own trustee. Typically, the adult child who holds the SDPOA or who is serving as guardian takes on this role. The trustee is responsible for:

• Making the monthly deposits on time
• Distributing funds in the correct priority order
• Keeping records that HHSC can audit
• Ensuring the account balance doesn't accumulate (all funds must be disbursed monthly)

What Happens at Death

When the parent dies, any funds remaining in the Miller Trust go to the State of Texas to reimburse Medicaid for the care it provided — up to the total amount of Medicaid assistance paid. This is separate from (and in addition to) any MERP claim against the probate estate.

In practice, because the trust must be fully disbursed each month, the remaining balance at death is usually minimal — often just the final month's deposits.

Setting Up the Trust

You'll need:

• The HHSC model QIT instrument (available in the MEPD Handbook, Appendix XXXVI) as a template
• A notary to execute the trust document
• A bank willing to open a trust account using the parent's SSN
• Legal authority to act — if the parent has lost capacity, you need an SDPOA that explicitly authorizes trust creation, or a guardianship order

Common pitfall: A generic power of attorney that doesn't specifically authorize "estate, trust, and other beneficiary transactions" may not be accepted by HHSC as sufficient authority to create and fund a QIT. This is one reason the SDPOA needs to be drafted with Medicaid planning in mind from the start.

The Income Cap in Context

The $2,982 monthly income cap catches more families than expected. A parent with a $2,200 Social Security benefit plus a $900 pension is over the cap. Without a Miller Trust, their only options are spending down to $2,000 in assets and then paying privately for care — which drains savings at $7,000–$8,000/month for nursing home care.

The Miller Trust doesn't cost the family anything beyond the initial setup. It's a paperwork mechanism, not a financial sacrifice. But the monthly administration is unforgiving — one missed deposit, one late disbursement, and eligibility is jeopardized for that month.

The Texas Power of Attorney & Guardianship Kit includes a QIT disbursement tracker and step-by-step setup instructions, plus the POA language needed to authorize trust creation if the parent can no longer act for themselves.

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