Understanding Miller Trusts for Long-Term Care in Williamson County
Key Takeaways: A Miller Trust, or Qualified Income Trust (QIT), is an irrevocable trust that lets Franklin, TN families redirect a loved one’s excess monthly income so it no longer counts against TennCare’s income cap, enabling Medicaid coverage for nursing home or in-home care. Because Tennessee is an "income cap" state with no medically needy spend-down pathway for seniors, even modest income can disqualify an applicant. A trustee manages the trust and may only spend funds on approved categories: personal needs allowance, spousal income allocation, health insurance premiums, and qualifying medical costs. Tennessee must be named as residual beneficiary for recovery of remaining funds after death, up to the total Medicaid paid. Timing matters because the trust generally only shields income deposited in the same month it is received.
A Miller Trust is a legal tool that can open the door to Medicaid coverage when a loved one’s monthly income is too high to qualify for nursing home or in-home care. Also known as a Qualified Income Trust (QIT), this arrangement lets families redirect excess income into an irrevocable trust so it no longer counts against TennCare’s income cap. For families in Franklin facing a care crisis, a properly structured Miller Trust can be the difference between qualifying for help and paying privately.
If your family is navigating an urgent care decision, the team at Sawyer & Associates can help you understand your options. Call our office at 615-570-9901 or reach out through our online contact page to discuss next steps for your situation.
Why Income Limits Trip Up So Many Tennessee Families
Tennessee operates as an "income cap" state, which means there is a hard ceiling on how much monthly income an applicant can have and still qualify for long-term care Medicaid. Even a modest pension combined with Social Security can push a parent over the limit. The frustrating part is that this income is rarely enough to cover the actual cost of nursing home care.
In 2026, the TennCare income threshold for nursing home or waiver care is $2,982 per month for an individual. Tennessee’s 2026 Medicaid eligibility criteria require assets under $2,000 and a nursing home level of care. Tennessee does not offer a "medically needy" spend-down pathway for seniors. In Tennessee and Texas, the medically needy pathway is limited to pregnant women and children and does not include seniors and people with disabilities. That gap is precisely why the Miller Trust exists.
💡 Pro Tip: Gather every income source before applying, including pensions, Social Security, annuities, and rental income. A single overlooked check can delay approval.
How a Qualified Income Trust Actually Works
A Qualified Income Trust works by capturing the income that exceeds the limit and placing it under the control of a trustee rather than the applicant. Once excess income flows into the trust each month, TennCare disregards it when measuring eligibility. Tennessee’s asset limit for Medicaid long-term care eligibility is $2,000 for an individual.
Tennessee law formally recognizes this arrangement for people who need facility or community-based care. Under Tenn. Comp. R. & Regs. 1240-03-03-.03(8)(a), individuals receiving or who will receive nursing facility services or HCBS whose income exceeds the Medicaid Income Cap may establish a QIT or "Miller Trust," and funds placed in a QIT are not treated as available resources or income for TennCare eligibility. Under Tenn. Comp. R. & Regs. 1240-03-03-.03(8)(b), a QIT is a trust consisting only of the individual’s pension income, Social Security income, and other monthly income.
The trust must be irrevocable, and the trustee may only spend the money on a narrow list of approved categories. You can review Tennessee’s governing rule through the state’s qualified income trust regulation for the full statutory language.
What the Trustee Can Pay Each Month
The trustee does not have free rein over the funds; disbursements are limited by regulation. A designated trustee manages the account and can only use trust funds for designated purposes, such as paying unreimbursed medical expenses and health insurance premiums of the Medicaid enrollee. Under Tenn. Comp. R. & Regs. 1240-03-03-.03(8)(d)(2)(i)-(v), permitted disbursements include a personal needs allowance, trust management expenses, a spousal income allocation, health insurance premiums, and qualifying medical or remedial care expenses.
Approved monthly disbursements generally include:
- A personal needs allowance for the Medicaid enrollee
- Up to a small monthly amount for trust management expenses
- A spousal income allocation under the spousal impoverishment rules
- Health insurance premiums
- Qualifying medical costs not covered by Medicaid
💡 Pro Tip: Keep meticulous records of every deposit and disbursement. TennCare can request documentation, and clean bookkeeping makes reviews smoother.
Protecting the Spouse Who Stays at Home
One of the most reassuring features of Medicaid crisis planning is the protection it offers the spouse who remains in the community. When one partner enters care, the other should not be left without enough to live on. The spousal impoverishment rules allow a portion of the couple’s income to be directed to the at-home spouse.
Tennessee sets a minimum monthly income floor for the non-applicant spouse. In Tennessee, the Minimum Monthly Maintenance Needs Allowance is $2,705 per month, effective July 1, 2026 through June 30, 2027. The Miller Trust can play a direct role here. Income from a Miller trust can be used to fund the Medicaid beneficiary’s personal needs allowance as well as a monthly allowance for the beneficiary’s spouse who remains in the community, with remaining funds going toward the cost of care, and states can recover funds remaining in the trust after the individual’s death.
| Key Figure | Tennessee Amount |
|---|---|
| Long-term care income limit (2026) | $2,982 / month (individual) |
| Individual asset limit | $2,000 |
| Spousal maintenance floor (MMMNA) | $2,705 / month |
💡 Pro Tip: If both spouses have significant income, ask an attorney how the spousal allocation interacts with the trust. The right structure can preserve more household income than expected.
Working With a Medicaid Planning Attorney Franklin TN Families Trust
Setting up a Miller Trust correctly is detail-driven work, and small mistakes can cause costly delays or denials. Tennessee requires specific language and handling of the account, including a required payback provision. The state of Tennessee must be named as a beneficiary on the account. This reflects the program’s right to recover funds remaining in the trust after the beneficiary passes away, up to the total amount Medicaid paid for their care.
A knowledgeable Medicaid planning attorney Franklin TN residents rely on can coordinate the trust with the larger care plan. That often means reviewing the timing of any asset transfers, the use of properly structured annuities or promissory notes, and the documentation that supports compliance. Our Medicaid crisis planning Franklin Tennessee team focuses on lawful asset preservation while proving strict adherence to the rules. For broader guidance, you can explore the helpful overview of Tennessee Medicaid eligibility rules before your consultation.
A Miller Trust is one piece of a larger planning picture. You can find more educational reading across our elder law Franklin Tennessee resources.
💡 Pro Tip: Start the Miller Trust before you submit the Medicaid application whenever possible. The trust generally only shields income deposited in the same month it is received, so timing matters.
When a Miller Trust Is Worth Considering
A QIT is most useful when income is the only barrier to eligibility, not assets. If a loved one needs a nursing home level of care and their income sits above the cap, this tool may be the natural solution. Because Tennessee places no statutory ceiling on the amount of income that can flow through the trust in institutional cases, even higher incomes can often be managed within the rules.
Frequently Asked Questions
1. Does a Miller Trust protect my assets, or only my income?
A Miller Trust addresses income, not assets. It allows excess monthly income to be disregarded for eligibility, but the separate $2,000 asset limit still applies. Other planning tools may be needed to address countable assets.
2. Can a Miller Trust be changed or canceled later?
No, the trust must be irrevocable to serve its purpose. Once established, it cannot be revoked or amended at will, which is why TennCare disregards the income. Because of this permanence, have the document drafted carefully the first time.
3. What happens to leftover money in the trust?
Any funds remaining at the beneficiary’s death are subject to the state’s recovery rights. Tennessee must be named as a beneficiary on the account, and the program may seek reimbursement for the care it provided, up to the amount Medicaid spent on the beneficiary’s behalf.
4. Is a Miller Trust used only for nursing home care?
No, it can also support home and community-based services. Across states that permit Miller Trusts, nearly all states allowing Miller Trusts for institutional care also allow individuals to use Miller trusts to qualify for Medicaid home and community-based services. That makes the QIT relevant for families seeking in-home care alternatives as well.
5. How common are these trusts across the country?
Roughly half of all states recognize Miller Trusts as an eligibility pathway. About half, 25 of 51 states, allow an individual residing in an institution to qualify for Medicaid LTSS with income higher than 300% of SSI if their excess income is administered through a qualified income or Miller trust. Tennessee is among the states that recognize this important tool.
Bringing It All Together for Your Family
A Miller Trust is a powerful and well-established way to overcome Tennessee’s income cap when a loved one needs long-term care. When drafted correctly, it captures excess income, protects a portion for the community spouse, and keeps the path to TennCare coverage open. The rules are specific, the timing matters, and the documentation must be precise, which is why thoughtful guidance is so valuable.
If you are weighing a Miller Trust or any part of long-term care planning in Franklin, the compassionate team at Sawyer & Associates is here to help you move forward with confidence. Call us today at 615-570-9901 or send a message through our secure contact form to start building a plan that protects what matters most.
