Qualified Income Trust Tennessee: How a Miller Trust Preserves ECF CHOICES Medicaid Eligibility

What a Qualified Income Trust Does

A Qualified Income Trust — commonly called a Miller Trust in Tennessee — is a legal tool that lets individuals with income above Medicaid's cap qualify for long-term care services, including ECF CHOICES. The trust receives the excess income that would otherwise place the applicant over the applicable cap, allowing the applicant to meet the program's financial test when the trust is properly established and funded.

Tennessee is an "income cap" state for Medicaid long-term care. If a person's gross monthly income exceeds the cap, they are categorically ineligible for Nursing Facility Level of Care Medicaid, regardless of how high their medical expenses are. The Miller Trust exists because Congress recognized that a hard income cutoff with no alternative would exclude people who clearly need long-term care services.

The 2026 Income Thresholds

For ECF CHOICES enrollment, the income test depends on the applicant's required Level of Care:

• Nursing Facility Level of Care: monthly income must be at or below $2,982 (300% of the 2026 SSI Federal Benefit Rate of $994)
• At Risk for Institutionalization: monthly income must be at or below $1,995 (approximately 150% of the federal poverty level)
• Working Disabled Demonstration Group: earned income up to $3,325 per month, provided unearned income stays under $994

The countable resource limit for all groups is $2,000 for an individual.

Most young adults transitioning from SSI at 18 fall well below these thresholds — the maximum SSI payment is $994, which is under both income caps. But the Miller Trust becomes necessary when:

• The young adult transitions from SSI to Disabled Adult Child (DAC) benefits that exceed the income cap
• The young adult has employment income that, combined with SSI or DAC, pushes total gross income above the threshold
• The young adult receives recurring income that pushes total gross monthly income above the applicable threshold

How the Miller Trust Works

The trust is irrevocable and established specifically to receive income that exceeds the Medicaid cap. Only the applicant's income can go into the trust — it cannot accept gifts, inheritance, or other third-party deposits. The trust must name the State of Tennessee (TennCare) as the remainder beneficiary, meaning any funds left in the trust at the beneficiary's death are paid to the state to reimburse Medicaid expenses.

Each month, the applicant's income that exceeds the cap is deposited into the trust account. The trust then makes authorized disbursements:

1. A personal needs allowance for the beneficiary (the amount varies based on the Medicaid category)
2. A spousal or dependent allowance, if applicable
3. Medical expenses not covered by TennCare
4. The patient liability amount owed to the service provider
5. Any remainder stays in the trust account

The critical rule: the trust must receive income deposits every month that the applicant's income exceeds the cap. Missing a month can trigger a Medicaid eligibility redetermination and potential loss of ECF CHOICES enrollment.

Setting Up a Miller Trust in Tennessee

A Miller Trust requires an attorney to draft the trust document. Tennessee courts do not have a standard-form Miller Trust — the document must comply with federal requirements under 42 U.S.C. § 1396p(d)(4)(B) and Tennessee's implementing regulations. Key elements:

• The trust must be irrevocable
• The beneficiary must be the sole income beneficiary during their lifetime
• TennCare must be named as the remainder beneficiary to the extent of Medicaid benefits paid
• The trust must have its own bank account, separate from the beneficiary's personal funds
• The trustee (typically a parent or family member) manages the account and makes disbursements according to the trust terms

Attorney fees for establishing a Miller Trust in Tennessee typically range from $500 to $1,500, depending on the complexity of the individual's income sources.

Miller Trust vs. ABLE Account vs. Special Needs Trust

These three tools serve different purposes, and families sometimes confuse them:

Miller Trust — addresses income eligibility only. It receives monthly income that exceeds the Medicaid cap. It does not protect savings or assets; it redirects income.

ABLE TN Account — protects assets (savings). The first $100,000 is excluded from SSI's $2,000 resource limit. Annual contributions are capped at $20,000. Tennessee's Public Chapter 44 eliminates Medicaid payback on ABLE funds at death.

Special Needs Trust — protects assets with no cap on the amount held. A first-party (d)(4)(A) trust is subject to Medicaid payback at death. A third-party trust (funded by parents or grandparents, not the beneficiary's own money) has no Medicaid payback requirement.

A young adult on DAC benefits above the income cap who also needs to protect savings might need both a Miller Trust (for income) and an ABLE account (for resources).

The Tennessee SSI at 18 & Adult Disability Benefits Guide walks through the income and resource calculations for ECF CHOICES eligibility, identifies when a Miller Trust is necessary, and includes a preparation checklist for the attorney consultation.

See more Tennessee guides →