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Miller Trust Guide
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How to Set Up a Miller Trust in Alabama: Step by Step

To set up a Miller Trust in Alabama, you complete the official Alabama Medicaid Qualified Income Trust template, name a trustee who is not the applicant, open a dedicated trust bank account, and deposit the applicant's income into it in the same calendar month you want coverage to begin. The trust diverts income above Alabama's $2,982/month long-term-care Medicaid cap (CMS January 2026 figures) so the applicant qualifies. For the core setup this is a paperwork-and-banking task most families handle themselves; for complex estates, consult a Alabama-licensed elder-law attorney. This guide is informational only and is not legal advice — we explain how to use Alabama Medicaid's own published form; we do not draft it.

Setting up a Miller Trust in Alabama is an operational task, not a legal one, as long as you use Alabama Medicaid Agency's own published template and do not deviate from it. Here is the full sequence, with the Alabama Medicaid fact behind each step.

  1. Confirm the applicant's income is over the Alabama cap

    A Qualified Income Trust only helps when monthly countable income exceeds Alabama's long-term-care Medicaid limit — $2,982/month single, $5,964/month for a couple where both apply (CMS January 2026 figures). If income is under the cap, a Miller Trust usually is not needed.

  2. Download the official Alabama Medicaid QIT template

    Get the model Qualified Income Trust instrument directly from Alabama Medicaid Agency on its .gov site. The Alabama Medicaid Agency publishes an official Qualifying Income Trust (QIT) packet — Form 262 with Handout #11 (Revised 05/30/04) — for an applicant whose income is over the cap to qualify for nursing-home (institutional) or home- and community-based-waiver Medicaid. We never draft or host the trust text — you use the state's own published form.

  3. Fill in the fields the template asks for

    Complete the data fields the Alabama Medicaid form requests — the applicant's name, date of birth, Social Security number, and each income source (Social Security, pension, and so on) — following the instructions printed on the template.

  4. Name a trustee who is not the applicant

    On the Alabama Form 262 the Medicaid claimant is the 'settlor' who transfers their income into the trust, and a different person serves as 'trustee' — the form contemplates a relative or friend, not the claimant — with an alternate (successor) trustee also named in case the first cannot serve.

  5. Open the dedicated trust bank account

    Open a dedicated bank account titled to the trust. A Alabama QIT is set up with the beneficiary's Social Security number — no EIN is required. Branches commonly hesitate, so know what to say before you go.

  6. Fund the trust in the same calendar month

    Deposit enough of the applicant's income into the trust account to bring remaining countable income below $2,982 — in the same calendar month you want coverage to start. Alabama Medicaid does not back-date, so the month you fund is the earliest month eligibility can begin.

  7. Distribute monthly and keep records

    Each month the trustee pays out only the allowed items (personal-needs allowance, any spousal allowance, medical costs and cost-share) and keeps the named income sources flowing into the account. Staying inside Alabama Medicaid's rules each month is what keeps benefits from being pulled.

The two steps families get stuck on are opening the bank account in Alabama and funding the trust before the calendar month closes — see how long setting up a Alabama Miller Trust takes for the timing rules.

Get the official Alabama Medicaid template

Download the model Qualified Income Trust instrument directly from Alabama Medicaid Agency: Alabama Medicaid Qualified Income Trust template . The Alabama Medicaid Agency publishes an official Qualifying Income Trust (QIT) packet — Form 262 with Handout #11 (Revised 05/30/04) — for an applicant whose income is over the cap to qualify for nursing-home (institutional) or home- and community-based-waiver Medicaid. It is an irrevocable trust funded only with the claimant's own income that names the Alabama Medicaid Agency as remainder beneficiary up to the total Medicaid paid, established with the claimant's Social Security number; the packet explains the QIT and supplies the fill-in trust, and the completed trust is submitted with the Medicaid application to the Alabama Medicaid Agency District Office. The income cap is set at 300% of the SSI benefit under Ala. Admin. Code r. 560-X-25-.10, and the QIT exception is authorized federally at 42 U.S.C. § 1396p(d)(4)(B). Alabama calls it a 'Qualifying Income Trust' — its version of what is generically called a Miller Trust. The kit explains how the published packet works and links you to the Agency's own materials; unlike New Jersey and Indiana, Alabama does not publish a separate memo to banks.