A “Miller Trust” is a device used to help someone who needs Medicaid, but has too much income, qualify. It is also called a “Medicaid Qualifying Income Trust”. 

The common name Miller Trust comes from a 1990 case from Colorado called Miller vs. Ybarra, in which a court approved this arrangement. It has since been authorized by a federal statute, 42 USC 1396p (d)(4)(B). Many states do not allow Miller Trusts, but fortunately Alaska does.

Miller Trusts should not be confused with Special Needs Trusts which are used to help someone who has too much assets qualify for Medicaid. Miller Trusts are only for income, not assets. However a Miller Trust can be used in conjunction with other arrangements, to help someone who has both too much income, and too many assets, to get qualified. Both of these types of trust, as well as a number of other strategies, can be used as a part of Medicaid planning.

Miller Trusts are critical in Alaska. The cost of a nursing home, assisted living home, or in-home care, often costs double here what it costs in other states. A nursing home bed typically costs more than $15,000 a month in Anchorage, and yet someone with more than $2,022 income does not qualify for Medicaid (in fact, depending on the type of Medicaid the person needs, the income level can be roughly half that amount). Without the possibility of a Miller Trust, someone with only a very modest income, and no assets, would have no way to pay for a nursing home.

A Miller Trust does not hold any assets. It only holds a bank account, into which all of the Medicaid recipient’s countable income is funneled. The trustee (that is, the manager of the trust, which has to be someone other than the Medicaid recipient) then pays out the money each month, according to a formula.