Miller Trust vs. Living Trust: What Florida Families Need to Know
Watch our detailed video explanation below to see these concepts in action
A Miller trust and a revocable living trust are both trusts, and that is where the similarity ends. A Miller trust, also called a qualified income trust, exists for one reason, to make you eligible for Florida Medicaid when your monthly income exceeds the cap, which is $2,982 in 2026. A living trust exists to avoid probate and pass assets to your heirs. A Miller trust holds only income, holds it for days, and gives whatever remains to the state when you die. A living trust holds assets, holds them for years, and gives them to your family. Putting excess income into a living trust will not make you Medicaid eligible, and using a Miller trust to protect assets for your children will not work either. Many Florida families need both, for entirely separate reasons.
When families in Florida face the cost of long-term care, they often run into confusing terminology around different types of trusts. If you feel overwhelmed by these options, you are not alone. Many Florida families have to make important decisions quickly, often in the middle of a health crisis. Here are the two tools in plain language.
Miller Trust and Living Trust at a Glance
What Is a Miller Trust and When Do You Need One?
A Miller trust, often called a qualified income trust or QIT, exists for one specific reason. It helps Florida residents qualify for Medicaid long-term care benefits when their monthly income is too high. It is authorized by federal law at 42 U.S.C. Section 1396p(d)(4)(B), and Florida implements those requirements through Florida Administrative Code Chapter 65A-1.
Florida's income limit for 2026
In Florida, if you are applying for Medicaid to help pay for nursing home care or home and community-based services such as assisted living or home health care, your monthly income cannot exceed $2,982 in 2026. That number changes every January. The limit counts everything you receive each month:
● Social Security benefits
● Pension payments
● IRA or 401(k) distributions
● Rental property income
● Any other regular income sources
How Miller trusts work in practice
Suppose your monthly income is $3,200. Because that exceeds Florida's $2,982 limit by $218, you would not qualify for Medicaid without this planning tool. A Miller trust solves the problem by creating a legal place to put that excess $218 each month.
Here is what happens:
- You, your spouse, or someone with a properly drafted power of attorney creates the Miller Trust
- Each month, the excess income, $218 in this example, goes into the trust
- The money immediately comes back out to pay for your health and medical expenses
- Your countable income for Medicaid purposes is now $2,982, making you eligible
Think of it as a legal funnel that briefly holds your excess income before it goes toward your care.
Important details about Miller trusts in Florida
Miller trusts do not accumulate wealth. Money flows in and immediately flows back out to pay for care-related expenses. Most days the balance should be close to zero. Our guide to how QIT or Miller Trust funding works walks through the monthly mechanics.
The trust must be irrevocable, and it can hold only income. Depositing savings, investment proceeds, or any other asset disqualifies it. When the Medicaid recipient passes away, federal and Florida law require that any remaining funds go to the Florida Agency for Health Care Administration as reimbursement before family members receive anything. Florida courts enforce this strictly. In Agency for Health Care Administration v. Spence, 394 So.3d 1207 (Fla. 3d DCA 2024), the Third District Court of Appeal reversed an order that would have distributed trust assets before satisfying the state's claim, holding the payback provision clear and unequivocal. Because these trusts rarely build up a balance, this seldom becomes a practical issue. The Florida Medicaid Trust and Annuity Recovery Program handles those claims.
Not every power of attorney allows someone else to create a Miller trust on your behalf. Federal law at 42 U.S.C. Section 1396p(d)(2)(A) permits the trust to be established by the individual, their spouse, a person with legal authority to act for them such as a guardian or agent under a durable power of attorney, or someone acting at their direction. If your power of attorney lacks the specific authority to create a trust and there is no spouse available, a guardianship proceeding may be the only path, which is slow and expensive.
What Is a Revocable Living Trust and How Does It Help?
A revocable living trust serves an entirely different purpose. Where Miller trusts deal with income problems for Medicaid eligibility, revocable living trusts primarily help families avoid probate court when someone passes away.
How living trusts function
When you create a revocable living trust in Florida, you typically serve as both the trustee, the person in charge, and the primary beneficiary during your lifetime. You keep complete control over everything in the trust.
If you become unable to manage your affairs, a successor trustee you chose can step in seamlessly to handle your financial matters, with no court involvement. When you pass away, assets in the trust transfer directly to your chosen beneficiaries without going through Florida's probate process.
Why living trusts do not help with Medicaid planning
Because you keep complete control over assets in a revocable living trust, Florida Medicaid counts those assets as if you own them directly. Moving assets into a revocable living trust will not help you qualify for benefits.
You also do not put income into a living trust, so it cannot solve an income-related eligibility problem. Some people assume any trust can serve any purpose, along the lines of, I already have a revocable trust, so I will just put my excess income in there to qualify for Medicaid. That belief leads to serious negative consequences. There are many different types of trusts serving separate and distinct purposes, used to achieve separate and distinct goals.
When living trusts can indirectly help with Medicaid
Probate avoidance. Assets that pass through your living trust avoid probate court. Because Florida's estate recovery program can claim against probate assets to recoup Medicaid expenses, avoiding probate may reduce the state's ability to recover from your estate.
Seamless management. If you develop dementia or become incapacitated, your successor trustee can manage your affairs without court intervention, which makes it easier to carry out any necessary Medicaid planning strategies.
Which Trust Do You Need?
The answer depends entirely on your situation.
You might need a Miller trust if
- Your monthly income exceeds $2,982, the 2026 limit
- You need nursing home care, an assisted living facility, home-based services, or PACE
- You want Medicaid to help pay for long-term care
- You have no other way to reduce your countable income
You might benefit from a living trust if
- You want to avoid probate for your heirs
- You own real estate or significant assets
- You want seamless management if you become incapacitated
- You prefer privacy, since probate is a public record
You might need both if
- You have income above the Medicaid limit and also want probate avoidance
- You are planning for both immediate Medicaid needs and long-term estate goals
Common Misconceptions
Many people believe they can solve a Medicaid income problem by putting money into a living trust. That does not work, because you keep control over living trust assets, so Medicaid counts them as yours.
Others think a Miller trust will protect assets for their family. Miller trusts deal only with income flow, not asset protection, and remaining funds go to the state after death.
Key Takeaways
- A Miller trust solves an income problem for Medicaid eligibility. A living trust avoids probate. They are not interchangeable.
- Florida's long-term care Medicaid income cap is $2,982 per month in 2026, and it changes every January.
- A Miller trust must be irrevocable and can hold only income. Putting assets in it disqualifies the trust.
- Whatever remains in a Miller trust at death goes to the state before family, and Florida courts enforce that strictly.
- A revocable living trust does not help you qualify for Medicaid, because you still control the assets.
- Not every power of attorney authorizes an agent to create a Miller trust. Without that authority, guardianship may be the only route.
Frequently Asked Questions
Q. Can I use my existing revocable living trust instead of a Miller trust?
A. No. A revocable living trust does not solve an income problem, because you retain control of what is in it, so Medicaid still counts it. Depositing excess income into a living trust will not make you eligible, and a revocable trust does not satisfy the federal requirements for a qualified income trust.
Q. What is the Florida Medicaid income cap in 2026?
A. $2,982 per month in gross income from all sources. The cap is set at 300 percent of the federal SSI benefit rate, so it adjusts every January with the cost-of-living adjustment. If your income exceeds it by even a dollar, you need a Miller trust to qualify.
Q. What happens to the money in a Miller trust when I die?
A. Any balance remaining goes to the Florida Agency for Health Care Administration, up to the amount Medicaid paid for your care, before anything passes to family. Federal law requires the state be named the primary remainder beneficiary. In practice these trusts hold very little at death, since income flows in and out each month.
Q. Can my spouse or my agent create a Miller trust for me?
A. Yes, if properly authorized. Federal law permits the individual, their spouse, a guardian or agent under a durable power of attorney, or someone acting at their direction to establish the trust. The power of attorney must specifically authorize trust creation. Many do not, which can force a guardianship proceeding.
Q. Do I need both a Miller trust and a living trust?
A. Many Florida families do, for separate reasons. The Miller trust makes you eligible for Medicaid now. The living trust keeps your assets out of probate later. Neither one does the other's job, so having one does not remove the need for the other.
Q. Can a Miller trust protect my assets from the nursing home?
A. No. A Miller trust holds only income and holds it briefly. It does nothing to shelter savings, real estate, or investments. Asset protection requires different tools entirely, which is why these two questions should be addressed together rather than one at a time.
Take Action Today
If you are facing long-term care costs in Florida, time usually works against you, and options narrow once you are already in crisis mode. Both Miller trusts and living trusts require careful drafting to work under Florida law. A Miller trust that does not comply with Medicaid regulations will not make you eligible, and a living trust that does not properly transfer assets will not avoid probate. More importantly, these tools work best as part of a comprehensive plan built around your family's actual goals. A good first step is to gather award letters and statements for every source of monthly income you receive, a list of your assets, and any existing trust documents. Bring that to a consultation and we will tell you which tool your situation calls for, or whether you need both. Our Florida Medicaid planning attorneys and estate planning attorneys work together on exactly this. When you are ready, schedule a consultation with our Florida elder law team. The best time to plan is before you need care, when you have the most options available to protect your family's financial security.
