Ohio Qualified Income Trust (Miller Trust): Setup, Rules, and Monthly Distributions

Ohio is a strict income-cap state for long-term care Medicaid. If your parent's gross monthly income exceeds the 2026 Special Income Limit of $2,982 by even one dollar — from Social Security, pension, retirement distributions, or any combination — they're categorically ineligible for institutional Medicaid, the PASSPORT waiver, and the Assisted Living Waiver. No spend-down option exists on the income side the way it does for assets.

The only mechanism to overcome this barrier is a Qualified Income Trust, commonly called a Miller Trust. Here's exactly how it works in Ohio.

What the Miller Trust Does

The trust creates a legal container that holds your parent's excess income. Once the income is deposited into the trust, it's no longer counted as the applicant's personal income for Medicaid eligibility purposes. The county DJFS caseworker evaluates income after the trust routing, seeing it at or below the $2,982 threshold.

Legal Requirements Under Ohio Law

Under OAC Rule 5160:1-6-03.2, the Miller Trust must meet strict criteria:

• Irrevocable — Once established, the trust cannot be modified or dissolved
• State of Ohio as primary beneficiary — Upon the applicant's death, any remaining trust funds (up to the total Medicaid benefits paid) go to the state before any other beneficiary
• Contains only qualifying income — Only the applicant's own monthly income goes into the trust. You cannot deposit other family money or asset proceeds
• The applicant cannot be the trustee — A family member, friend, or professional fiduciary must serve as trustee

Step-by-Step Setup Process

1. Draft the trust document. The trust language must comply with OAC 5160:1-6-03.2. This names the applicant as the beneficiary, designates the trustee (typically an adult child), identifies the State of Ohio as the remainder beneficiary, and specifies that only the applicant's qualifying income will be deposited. Many elder law attorneys draft these for a flat fee, but families can also use a compliant template.

2. Open a dedicated trust bank account. The trustee takes the signed trust document to a commercial bank and opens a checking account in the trust's name. This must be a completely separate account — never commingled with other family funds.

3. Route monthly income into the trust. The trustee must set up direct deposits so that your parent's Social Security, pension checks, and any other monthly income flow directly into the Miller Trust account. This routing must be completed in the first month of eligibility and maintained continuously every month.

4. Distribute funds in the correct order. This is where most families make compliance errors. Each month, the trustee must distribute the trust funds in this exact statutory sequence:

1. Parent's personal needs allowance ($50/month for nursing facility residents)
2. Community Spouse Monthly Income Allowance (if applicable — bringing the healthy spouse's income up to $2,705, or higher if housing costs are excessive, up to $4,066.50)
3. Medicare Part B and Part D premiums
4. Remaining balance goes to the facility or waiver provider as "Patient Liability"

The trust account should have a near-zero balance at the end of each month. Leaving accumulated funds in the account can trigger a technical denial of eligibility.

5. Submit verification. The trustee submits the signed trust document, bank account setup records, and the first month's statements to the county DJFS using Form ODM 10193 (QIT Verification). Ongoing monthly statements may be requested for continued compliance monitoring.

Common Mistakes That Cause Denials

Depositing non-qualifying income. If a family member puts their own money into the trust account, or the trustee deposits asset liquidation proceeds, the trust can be disqualified.

Incorrect distribution order. Paying the facility first instead of the personal needs allowance violates the statutory waterfall. The caseworker checks the distribution sequence.

Missing a monthly deposit. If income isn't routed into the trust for even one month, that month's eligibility can be revoked.

Using a revocable trust. The trust must be explicitly irrevocable in its language. Standard revocable living trusts do not qualify.

Personal Services Contracts: A Related Strategy

If your parent's income is under the $2,982 limit but their assets exceed $2,000, a Personal Services Contract (PSC) offers a legitimate spend-down tool. A PSC is a written agreement where your parent pays a family caregiver at fair-market rates for documented care services. The payments reduce countable assets while compensating the family member for real work.

The critical rule: the PSC must be signed before any caregiving services are provided. Retroactive payments — paying a family member for care they've already given — are treated as uncompensated gifts and trigger transfer penalties under the 60-month lookback.

The contract must specify an hourly rate aligned with local fair-market care rates, require daily service logs, and the caregiver must report the payments as taxable income.

The Ohio Dementia & Memory Care Guide includes a Miller Trust setup checklist, a monthly distribution tracking log, and an editable Personal Services Contract template with the required legal provisions.

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