A Miller Trust works in Arkansas by routing all of a person’s countable monthly income through a dedicated, irrevocable bank account so that Medicaid ignores that income when deciding whether the person qualifies for long-term care. Each month the trustee deposits everything coming in (Social Security, pension, annuity payments) and pays it back out in a fixed order approved by the Arkansas Department of Human Services: a small personal needs allowance, any allowance for a spouse at home, health insurance premiums, and finally the patient’s share of the nursing facility bill. Whatever is left in the account when the beneficiary dies goes to the state to reimburse what Medicaid spent.
When You Actually Need One
Arkansas Medicaid uses a “special income level” for long-term care set at 300 percent of the federal SSI payment rate.1Medicaid and CHIP Payment and Access Commission. Eligibility for Long-Term Services and Supports For 2026 that cap is $2,982 per month, tied to the $994 SSI federal benefit rate.2Social Security Administration. SSI Federal Payment Amounts for 2026 The number adjusts every January with the Social Security cost-of-living increase, which was 2.8 percent for 2026.3Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
If gross monthly income reaches $2,983 or more, the applicant is over the cap and needs the trust. Two points where families get tripped up. Medicaid looks at gross income, not the net amount that lands in checking after Medicare and tax withholdings, so the figure on the Social Security award letter or pension statement is what counts. And the trust only helps when income sits above the cap but below the actual monthly cost of care; if income already covers the private-pay bill, there is no gap for Medicaid to fill and no reason to set up a trust.
What the Trust Document Has to Say
The trust must be irrevocable. Once it is signed, its terms cannot be amended, revoked, or redirected to different beneficiaries while the Medicaid recipient is alive. It can hold only the beneficiary’s own income (Social Security, pension, and similar sources) plus any interest that accrues inside the account. No gifts, no loans, no outside deposits.
Federal law also requires the trust to name the state as the primary remainder beneficiary, meaning Arkansas DHS gets whatever is left at death up to the total Medicaid paid out.4Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets Miller Trusts work in Arkansas because the state uses the special income level pathway; a document missing the state payback language or written to allow non-income deposits will be rejected on review.
The document has to identify the settlor (the person whose income funds the trust), the trustee, and the bank where the account will live. Arkansas DHS publishes a standardized Income Trust form, DCO-9938, on its Forms and Documents page.5Arkansas Department of Human Services. Forms and Documents Using the state’s own template is the safest route because it removes any question about whether the required language is present. Elder law attorneys can draft custom documents as well. The trust has to be signed and notarized before the bank account is opened or anything is submitted to DHS.
Opening and Funding the Account
After signing, the trustee takes the notarized trust to a bank and opens a dedicated account in the trust’s name. Arkansas DHS requires a single account; it cannot be joint with anyone.6Arkansas Department of Human Services. Income Trust Fact Sheet Most banks will ask for an Employer Identification Number so the account is titled to the trust rather than the individual. You can get an EIN online from the IRS at no charge.
The rule that trips people up: all countable income must go into the trust each month, not just the amount that exceeds the $2,982 cap.6Arkansas Department of Human Services. Income Trust Fact Sheet The income can be direct-deposited into the trust account or moved in as soon as the beneficiary receives it. Depositing part of the check into personal checking and the rest into the trust is not allowed and can cost Medicaid coverage.
Timing is strict. Medicaid eligibility for a given month requires that all of that month’s income was deposited into the trust account during that same calendar month. Miss a month and coverage lapses for that period, which turns the nursing home bill back into a family bill. Direct deposit through Social Security and the pension administrator is the most reliable way to keep the trust in compliance.
How the Money Comes Back Out
The trustee cannot spend from the account at will. Each disbursement follows the payment order on the Long Term Care/Assisted Living Post-Eligibility Income Worksheet (DHS-712) that the caseworker provides. The order is:
- Personal needs allowance. Arkansas nursing home residents on Medicaid keep $40 per month for personal expenses.
- Community spouse maintenance allowance. If a spouse still lives at home, part of the trust income can be paid to that spouse. The federal minimum for 2026 is $2,705 per month effective July 1, and the actual figure depends on the spouse’s own income and housing costs.7Medicaid.gov. 2026 SSI and Spousal Impoverishment Standards
- Health insurance premiums, including the 2026 Medicare Part B premium of $202.90 and any supplemental coverage.8Centers for Medicare and Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
- Patient liability, the share-of-cost payment sent directly to the nursing facility or care provider.
Anything outside that list (bank fees, account maintenance charges, tax payments, an unexpected expense) requires the trustee to notify the caseworker and get written approval on the DHS-712 before paying. Writing a check first and explaining later can trigger a penalty period and loss of eligibility.6Arkansas Department of Human Services. Income Trust Fact Sheet Get approval first, then pay.
Who Serves as Trustee
Arkansas allows the Medicaid beneficiary to serve as their own trustee.6Arkansas Department of Human Services. Income Trust Fact Sheet In reality, most people entering nursing care are not in shape to handle monthly deposits, worksheets, and caseworker communications, so a spouse, adult child, or another trusted family member usually takes the job. The role is not complicated but it is unforgiving: deposit every dollar of income each month, disburse only in the approved order, keep clean records, and report changes to the caseworker.
The trust document should also name at least one successor trustee. If a sole trustee later becomes unable to manage the account and no replacement is named, administration stalls and Medicaid coverage is at risk.
Filing With DHS and Starting Coverage
The signed and notarized trust, along with proof that the bank account has been opened and funded, goes to the local DHS county office handling the long-term care application. A caseworker checks that the state payback clause is present, the parties are properly identified, and the language matches what Arkansas Medicaid requires. DHS then issues a Notice of Action either accepting the trust or listing deficiencies to correct.
Eligibility cannot start earlier than the first day of a month in which all of the following are true: the trust is signed, the bank account is open, all of that month’s income has been deposited into it, and no unauthorized payments have been made.6Arkansas Department of Human Services. Income Trust Fact Sheet Every month between admission and trust approval is a month the family pays the full private rate. Getting the trust signed, the account opened, and the first deposit made inside the same calendar month as the Medicaid application is the single biggest thing families can do to limit out-of-pocket exposure.
What Happens at Death
A Miller Trust is not an inheritance vehicle. When the beneficiary dies, federal law requires whatever is in the account to go to the state up to the total Medicaid spent on that person’s care.4Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets In practice, balances tend to be small because the approved monthly disbursements (personal needs allowance, spousal share, insurance premiums, patient liability) usually consume most or all of what came in. The trust document can direct any true surplus to named beneficiaries, but with long-term care costs typically running several thousand dollars a month, the state’s claim almost always eats the remainder.
Recordkeeping and the Annual Review
Approval is not permanent. Arkansas reviews the beneficiary’s financial situation periodically, and the trustee has to produce records showing every deposit and every disbursement. Keeping monthly bank statements and copies of each DHS-712 worksheet in one place makes the review routine rather than stressful.
The income cap also moves every January with the Social Security cost-of-living increase, so the trustee should check the new threshold each year to confirm the trust is still needed. If the beneficiary’s income later drops below the cap (a lost pension, a benefit reduction), the trust may no longer be necessary, but the account should stay open until the caseworker confirms it can be closed.
One boundary worth flagging: a Miller Trust only fixes an income problem. Arkansas also imposes resource limits (an individual on nursing facility, assisted living, ARChoices, or DDS Waiver coverage can hold no more than $2,000 in countable assets, and a community spouse can keep resources up to $162,660 under a formula-based calculation).9Arkansas Department of Human Services. Health Care Eligibility Quick Reference Excess resources have to be addressed separately; the trust does nothing about them.