Tennessee Qualified Income Trust Requirements Guide — Qualify a Family Member for Medicaid Before the Next Billing Cycle

Before you buy

Who this guide isn't for

We'd rather you not buy something you don't need. Skip it if:

• The income is at or under $2,982/month. A Qualified Income Trust usually isn't needed. Check the number with the free income-cap check.
• The obstacle is savings or property, not income. A Qualified Income Trust only deals with income. See Medicaid asset protection trusts for the asset side.
• Money or property was given away in the last five years, or other trusts are involved. That needs a Tennessee elder-law attorney.
• You want someone to handle the whole thing for you. An attorney drafts the trust either way in Tennessee. This guide makes that engagement shorter; it doesn't replace it.

The bank step

The bank refusal nobody warns you about

You walk into your branch with the signed trust. The teller calls a manager. The manager has never seen one. They ask for an EIN. They tell you to come back with an attorney. You drive home with an empty trust account and a Medicaid clock ticking.

This is the single most common reason Tennessee families lose a month of benefits, and it has nothing to do with the trust itself — it is a bank-procedure problem. The guide's bank section gives you the exact language to cite at the counter, the TennCare policy reference to read aloud, and a printable resolution letter you can hand to the branch manager so they can escalate inside their own bank instead of sending you away.

Refusals the guide walks you through:

• Branch asks for a tax ID (EIN) for the trust account.
• Branch is unsure what kind of account this is.
• Branch has never opened a Qualified Income Trust account before.
• Branch wants to know who is authorized to sign.
• Branch questions why certain fees can't be deducted from the account.

Each refusal has a corresponding response in the guide, with the TennCare citation behind it.

Avoid these

The 6 most common Tennessee denial reasons

Every denial reason below cites TennCare policy. The full guide explains each one in context and the order in which to verify them before submitting the Medicaid application.

▸ Trust is revocable, or the grantor retains modification power

TennCare's policy requires the Trust be irrevocable, modifiable only by the trustee or a court, and only to preserve eligibility. A Trust the grantor can amend or revoke fails outright. — ABD Trusts Policy 110.055 §4.h.iv

▸ Income outside the Trust still exceeds the income limit

The amount NOT placed in the Trust must be at or below TennCare's income limit. If it isn't, the individual is ineligible regardless of how much income the Trust holds -- a common mistake when a source is only partially diverted. — ABD Trusts Policy 110.055 §4.h.ii

▸ Missing or defective State-of-Tennessee payback clause

The Trust must direct that, on death or termination, the State receive all remaining funds up to the total TennCare benefits paid on the individual's behalf, with an accounting. A missing, weakened, or capped payback clause fails this requirement. — ABD Trusts Policy 110.055 §4.h.iv

▸ Trust pays a disallowed expense

TennCare's policy explicitly bars the Trust from paying trustee fees, attorney fees or costs, accountant fees, court fees or costs, guardian ad litem fees, funeral expenses, past-due medical bills, or other debts. Paying any of these out of the Trust is a documented compliance failure, not a gray area. — ABD Trusts Policy 110.055 §4.h.vii

▸ Trust income isn't distributed under the required monthly process

The trustee must distribute essentially all Trust income each month (minus the small trust-expense allowance) through the allowable-payment categories. Letting income sit unspent outside that process, or applying it to something outside the defined list, is a failure point. — ABD Trusts Policy 110.055 §4.h.iv-v

▸ Trust benefits someone other than the individual and the State

The Trust's sole beneficiaries must be the individual and the State of Tennessee. Naming any other beneficiary, or structuring payments to benefit a third party outside the allowable list, breaks the Trust's validity. — ABD Trusts Policy 110.055 §4.h.iv

The author

Who's behind this

I'm James Whitfield. I read every TennCare policy section on these trusts and tied every step in this guide to the section it comes from, so you can check any of it yourself. I'm a researcher, not an attorney. For advice on your own situation, a Tennessee-licensed attorney is the right call.

Questions

Frequently asked questions

▸ Is the Tennessee Qualified Income Trust Kit legal advice?

No. This kit is informational only and is not legal advice. We are not attorneys and we do not practice law. TennCare does not publish a fill-in trust form, so the kit teaches you exactly what TennCare's own ABD Trusts policy requires a compliant trust to contain, so you can brief an attorney efficiently and verify what they draft. For advice on your specific situation, consult a Tennessee-licensed elder-law attorney.

▸ Does TennCare provide an official Qualified Income Trust form?

No. TennCare's ABD Trusts policy (110.055) spells out in detail what a compliant trust must do -- irrevocable, a defined distribution and payment process, and a State-of-Tennessee payback clause -- but does not attach a sample or fill-in instrument. The trust must be drafted, by an attorney or by you where Tennessee law permits, to meet the requirements this kit lays out.

▸ What does the kit include?

A requirements-and-operations guide: the required-provisions checklist derived from TennCare's own ABD Trusts policy with a citation for each item, guidance on gathering the information an attorney needs before your first meeting, the monthly funding and distribution worksheet, the bank-account walkthrough, and Tennessee-specific denial-avoidance guidance. Delivered as a single PDF.

▸ Do you provide the trust document itself?

No. We never draft or provide sample or model trust language, generic or otherwise -- that would cross from explaining the law into practicing it. The kit tells you exactly what TennCare requires the finished trust to contain; drafting it is your attorney's work (or, where permitted, your own).

▸ Who needs a Qualified Income Trust in Tennessee?

A person applying for TennCare Medicaid long-term services and supports -- nursing facility care, or a CHOICES/ECF CHOICES home and community-based services waiver -- whose gross monthly income is above the 2026 income limit of $2,982/month (single) but who would otherwise qualify. Both nursing-facility and HCBS applicants are tested against the same income standard.

▸ How much of my income goes into the trust?

Enough to bring the income you keep outside the trust to at or below TennCare's income limit. You may direct some or all of your income into the trust, but the amount left outside it must be at or below the limit, or you remain ineligible regardless of what's in the trust.

▸ What if my bank refuses to open the trust account?

Bank refusal is common on a first attempt because most branch staff have never opened a Qualified Income Trust account. The kit covers the most common refusal types — an EIN demand, confusion about what kind of account it is, uncertainty over who's authorized to sign, and questions about which fees can't be deducted — and the TennCare ABD Trusts policy facts that resolve each. If your branch still can't accommodate it, ask for the trust department or a full-service branch; community banks and credit unions are often more flexible.

▸ Can I be my own trustee in Tennessee?

TennCare's own policy doesn't explicitly say. A Tennessee legal-aid resource states the trustee must be someone other than the applicant, consistent with general trust law's caution against a sole beneficiary also serving as sole trustee. Confirm this directly with your drafting attorney.

▸ Does a Tennessee Qualified Income Trust need an EIN?

TennCare's policy doesn't address this. Practitioner sources describe Tennessee QITs as generally opened under the beneficiary's own Social Security number. If a bank asks for an EIN out of habit, confirm the titling with your attorney and the bank.

▸ What can the trust actually pay for?

TennCare's policy limits Trust payments to a defined list: the individual's Personal Needs Allowance, a small trust-expense deduction, spousal/dependent allowance if applicable, non-TennCare health insurance premiums, and specific approved non-covered medical costs. It explicitly bars trustee fees, attorney fees, accountant fees, court costs, funeral expenses, and other debts from being paid out of the Trust.

▸ Is Social Security counted before or after the Medicare Part B premium for Tennessee's income cap?

Before. TennCare's own income policy (ABD Income Overview, Policy 110.005) counts income at its gross amount, and specifically names Medicare premium withholding as an amount that still counts as received. So the income-cap/trust-funding test uses your full Social Security amount, not the lower amount that hits your bank account after Part B is withheld. The Part B premium is only deducted later, as one of TennCare's post-eligibility deductions from total income when your monthly patient liability (cost-of-care contribution) is calculated -- and TennCare's rule (Post-Eligibility Treatment of Income, Policy 125.020) does not allow that deduction at all if you're SSI-eligible or enrolled in a Medicare Savings Program (QMB, SLMB, QI, or QDWI), since Medicaid or the state is already covering that premium in those cases.

▸ What is TennCare's official order for deducting income before patient liability is calculated?

TennCare's Post-Eligibility Treatment of Income policy (Policy 125.020) sets out a specific ranked order of deductions from total income: (1) the Personal Needs Allowance, (2) mandatory expenses such as garnishments, court-ordered support, and the trust's own administrative fee, (3) the Community Spouse Income Maintenance Allowance if applicable, (4) the Dependent Income Maintenance Allowance if applicable, (5) health insurance premiums, coinsurance, and deductibles, (6) incurred medical expenses not covered by TennCare, and (7) any carried-forward incurred medical expense amount not previously deducted. What's left after these seven deductions is the patient liability amount owed to the nursing facility or, for a QIT, paid from the trust toward the facility's cost of care under the trust's own required distribution process.

▸ Do you offer a refund?

Yes -- money back if TennCare rejects the Qualified Income Trust because of something in the kit. Email support@millertrustguide.com within 30 days of purchase with the agency's stated denial reason and we issue a full refund within one business day. If the agency hasn't decided within 30 days, email anyway: the guarantee still applies once you have the denial.

▸ Will you talk to me on the phone about my situation?

No. We do not offer phone support and we do not advise on individual situations. For advice on your specific situation, consult a Tennessee-licensed elder-law attorney -- you can find one through the Board of Professional Responsibility's Lawyer Referral Services listing, or through Legal Aid of East Tennessee, Memphis Area Legal Services, or West Tennessee Legal Services.

▸ Which banks will open a Qualified Income Trust (QIT) bank account in Tennessee?

There's no published list of banks that offer QIT accounts — most retail branches simply haven't opened one before, since it's an uncommon account type, not because anything is wrong with the trust itself. In practice: larger banks (Chase, Wells Fargo, Bank of America) generally have a centralized trust department that can process the request even when a branch teller can't; full-service branches (often a market's main branch) open commercial and trust-style accounts more routinely than limited-service branches; and community banks and credit unions are frequently the most willing, since their account-opening process tends to involve a human review rather than a screen-driven template. TennCare's ABD Trusts policy is silent on tax-ID treatment -- it does not mention an EIN anywhere in Policy 110.055. As a trust composed of the individual's own income under 42 U.S.C. § 1396p(d)(4)(B), a Tennessee QIT is generally described by practitioner sources as opened using the beneficiary's Social Security number rather than a separate EIN, consistent with how most (d)(4)(B) grantor trusts are banked nationally -- but this isn't confirmed by TennCare's own policy either way. If a branch asks for an EIN out of habit, confirm the account titling with your attorney and the bank. The guide includes the exact script to use at the counter and a printable letter for a branch manager if the first attempt is refused.

▸ When does Tennessee Medicaid coverage begin after the Qualified Income Trust is set up?

Coverage begins the calendar month the QIT is signed, the trust account is opened, and enough of the applicant's income is deposited to bring remaining countable income below the 2026 special income limit of $2,982/month — all in the same calendar month. There is no back-dating, so every month of delay is another month of full private-pay care ($9,429–$10,038/month in Tennessee). Source: TennCare TennCare ABD Manual, Policy No. 110.055, Section 4.h ("Qualified Income Trust (QIT) or Miller Trust"), effective 05/01/2026.

▸ What happens to the money in a Tennessee Miller Trust when the beneficiary dies?

On the individual's death, or whenever the Trust is no longer required to establish or maintain TennCare Medicaid eligibility (including when nursing facility or HCBS care is no longer medically necessary or being received), the Trust terminates. The trustee must then pay the State of Tennessee all amounts remaining in the Trust, up to the total TennCare medical assistance paid on the individual's behalf, along with a full accounting of the Trust's payments. TennCare's ABD Trusts policy names a dedicated Estate Recovery Unit for Special Needs and Pooled Trusts elsewhere in the same manual chapter, but does not state in the QIT subsection itself which office processes a QIT's final payback -- confirm the correct unit and any required paperwork with TennCare or your attorney before distributing any remaining balance, and keep proof of payment in the Trust file. TennCare does not publish a separate residuary remittance form for QITs.

▸ Can you set up a Tennessee Miller Trust without a lawyer?

TennCare's ABD Trusts policy does not state whether a Qualified Income Trust must be attorney-drafted, and no Tennessee case or bar opinion specifically addresses QIT kits (see the UPL notes). But because TennCare publishes no fill-in instrument, drafting an original trust from the requirements below is, in practice, an attorney task for most families -- self-drafting an original legal instrument carries materially more risk of missing a required clause than filling in an existing state form would. Budget for an attorney; this kit is what keeps that engagement efficient.

▸ Can an attorney, paralegal, or care manager use this guide for a client?

Yes. It explains Tennessee's own published Qualified Income Trust process in plain language, which works whether you're doing this for your own family member or for a client — professionals handling a case outside their usual specialty use it as a working reference this way. It doesn't replace your own judgment on a specific client's facts and isn't personalized advice; it's the same walkthrough of Tennessee's official form either way. If you expect to use it across more than a handful of clients or want redistribution rights, email support@millertrustguide.com about licensing options.

▸ Do I need a Miller Trust in Tennessee?

It applies when the person who needs long-term-care Medicaid has gross monthly income over Tennessee's income cap of $2,982 (effective May 1, 2026 (TennCare ABD Trusts Policy 110.055 revision)). Count gross income before any deductions: Social Security, pension, annuity and similar income paid in their name. It applies the same way whether you're their child, their spouse, or a professional helping them. If the income is under the cap, a Miller Trust usually isn't needed. If you're the spouse staying at home, only the applicant's own income counts toward this cap, not yours; separate federal protections, a resource allowance and, when your own income is low, a monthly income allowance, keep you from being left without enough to live on.

▸ What if TennCare changes its requirements or the income cap after I buy?

If TennCare revises its published requirements or policy within 12 months of your purchase, email support@millertrustguide.com and we'll send the updated edition free. This page shows the date it was last verified against TennCare (August 8, 2026). The income cap is different: it's a routine yearly adjustment that follows the federal benefit rate each January, TennCare publishes the new figure, and you use it in place of the old one; the steps stay the same.

Keep reading

Step-by-step Tennessee guides

New to this? What Is a Miller Trust? covers the plain-English basics — what it is, why states use different names for it, and how it differs from a Medicaid Asset Protection Trust. Below are the free operational walkthroughs that go deeper on the questions Tennessee families ask most.

Primary sources

State agency sources

Last verified against TennCare on August 8, 2026. Email support@millertrustguide.com if anything below conflicts with what TennCare currently publishes — we correct verified discrepancies within five business days.