A Texas elder-law attorney once described the Miller trustto me as “the question every Texas family asks in a panic, and the answer that takes forty minutes to set up and a week to fund.” She was being generous on the forty minutes. But she was right about the rest.

If your parent applied for Texas Medicaid for long-term careand the application was rejected because their monthly income exceeds $2,901, you’ve almost certainly heard the term Qualified Income Trust— QIT, or Miller trust — and you’ve probably heard you need to set one up fast. This piece is for the adult child trying to figure out, in a hurry, what a QIT actually does, who needs one, how it’s set up, and what it costs. The short answer: it’s paperwork, not magic, and most Texas families with even a modest pension or IRA distribution end up needing one.

Why Texas uses an income cap at all

State Medicaid programs for long-term care split into two types: income-cap states (Texas, Florida, Arizona, and 16 others) and medically-needy states(California, New York, Pennsylvania, and the rest). In an income-cap state, your parent’s gross monthly income must be at or under a fixed threshold, full stop. In a medically-needy state, income above the threshold can be “spent down” on medical expenses each month and the remainder doesn’t count.1

The federal Medicaid statute anticipated the harshness of a hard income cap and created a workaround: 42 U.S.C. § 1396p(d)(4)(B), the Qualified Income Trust. If a state adopts the income-cap model, it must accept QITs as a way to keep income above the cap from disqualifying an otherwise-eligible applicant. Texas adopted the model and accepts QITs through HHSC’s implementing rules in Handbook section F-7000.2

The two-minute version of how the QIT works

The mechanics are simpler than the name suggests. A QIT is an irrevocable trust, named after a 1990 court case (Miller v. Ibarra), with three operating rules:

  1. It has its own bank account.Most commonly a basic checking account at the parent’s existing bank. The account is titled in the trust’s name (e.g., “The Mary Smith Qualified Income Trust”), with the trustee as signatory.
  2. Income above the cap flows in each month. Either the entire income stream is deposited into the QIT (the simpler approach), or just the portion above the cap. Most attorneys recommend the entire stream because it removes any risk of the math being off.
  3. Money flows out the same month, to specific categories. A Personal Needs Allowance ($60 in 2026) to your parent; health-insurance premiums (Medicare Part B, Medigap); the community-spouse allowance if applicable; and the rest to the nursing facilityas the “applied income.”

Who actually needs one

Anyone whose parent is applying for Texas Medicaid LTC and whose gross monthly income exceeds $2,901 in 2026. Gross income includes:

For most Texas retirees, Social Security alone is below the cap. Add even a modest pension or a regular IRA RMD on a $250,000 balance and the cap is exceeded.

The exact sequence (the 30 days)

The QIT is on a clock because Medicaid eligibility runs calendar-month-by-calendar-month. To be eligible for the month of, say, June, the QIT has to exist and the June income has to flow through it. If you set up the QIT on June 15 and miss the June income, the family loses a month of Medicaid coverage. Here’s the practical sequence to follow:

  1. Day 1–3: Engage a Texas elder-law attorney.The Texas Board of Legal Specialization maintains a directory of board- certified elder-law specialists. A QIT drafting engagement is typically a flat fee ($500–$1,500) and the attorney will often see you within a week. Do not use a generic online trust template — HHSC verifiers in different counties have rejected non-Texas-specific templates more than once.3
  2. Day 3–7: Sign the trust.The trust instrument is short (4–8 pages typically) and names: the grantor (the parent or their POA agent), the trustee (usually an adult child), and Medicaid as the primary remainder beneficiary. Notarization is standard.
  3. Day 7–10: Open the bank account. Bring the executed trust to the parent’s bank. Some larger banks have a specific form for trust account opening; community banks often complete it in one visit. The bank may require the trust’s EIN (apply online at IRS.gov; takes 10 minutes).
  4. Day 10–15: Reroute income.For Social Security, file SSA-1199 (the direct-deposit change form) to redirect the Social Security deposit to the QIT account. For pensions and other income, contact each payer directly. Routing usually takes one full cycle (4–8 weeks for SSA, faster for pensions); in the interim, deposit each month’s income manually.
  5. Day 15–30: File the Medicaid application. HHSC Form H1200-A, with the executed trust, bank-statement evidence of funding, asset documentation, and the medical assessment from the nursing facility.4

A diligent family with a responsive attorney closes this out in three weeks. A family that hits a snag — a bank that needs additional documentation, an SSA processing delay — takes five or six. Either way, every month the QIT operates correctly is a month of Medicaid coverage on the table.

What it costs and what to budget

The total out-of-pocket setup ranges from about $500 to $2,000, depending on attorney rate and complexity:

A more comprehensive Medicaid planning engagement (which can include the QIT, asset-protection planning, the H1200-A application, and post-eligibility maintenance) typically runs $3,500–$7,500. Whether to engage at that level depends on the asset picture. For a single parent with modest non-exempt assets and a clear income story, the standalone QIT is often sufficient.

If your parent is married

When only one spouse needs nursing-home care, the community-spouse rules layer on top of the QIT mechanics and significantly reduce the practical impact of the income cap. The well spouse keeps their own income entirely (no income cap applies to a non-applicant) and has access to a community-spouse allowance from the applicant’s income if their own income is low.5 The QIT still has to be set up for the applicant spouse, but the post-QIT applied income to the facility is reduced by what flows to the well spouse first.

What the QIT does not do

A common misconception — sometimes encouraged by marketing — is that the QIT “protects” income for the family. It does not. The income still pays for care; the trust just lets the state ignore it for eligibility math. After the personal-needs allowance, health premiums, and spousal allowance, the remaining income flows out of the QIT to the nursing facility as “applied income.”6What changes is the state’s willingness to also pay its share; the QIT unlocks the Medicaid payment.

A second misconception: the QIT is not an asset-protection tool. It addresses the income test only. Assets above the $2,000 limit still need to be addressed separately — through spend-down, the homestead exemption, thecommunity-spouse resource allowance, or other planning mechanisms.

The bottom line

The Texas QIT is the single most common Medicaid-eligibility step for retirees with even a modest income. It’s a paperwork instrument, not a strategic one. The risk isn’t complexity — it’s timing. Each month the trust isn’t funded is a month of Medicaid coverage forfeit. A Texas elder-law attorney engagement this week, a bank account next week, and a Medicaid application the week after that is a reasonable three-week sequence. The most expensive mistake is the one most families make: waiting six weeks to find an attorney while the parent stays in a private-pay nursing bed at $9,000 a month.