Who Can Be the Trustee of a Qualified Income Trust in Tennessee?
In Tennessee, the trustee of a Miller Trust (Qualified Income Trust) is whoever manages the trust account — depositing the applicant's income each month and paying out only what TennCare allows. TennCare's ABD Trusts policy (110.055) never explicitly states that the trustee must be someone other than the individual -- it consistently treats "trustee" and "individual"/"grantor" as separate roles throughout ("the trustee shall distribute," "the trustee or a court... shall have the right to modify"), but doesn't spell out a bar on self-trusteeship in so many words. A Tennessee legal-aid resource (help4tn.org, a program of the Tennessee Alliance for Legal Services) states directly that 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 (the "merger" doctrine, which can collapse a trust back into an ordinary asset), but this is not TennCare's own primary-source language. Confirm the trustee question directly with your drafting attorney -- this kit does not treat self-trusteeship as either explicitly permitted or explicitly barred by the state's own policy text. The trustee does not have to be a lawyer or a professional; for the core setup this is a role most families fill themselves. For a complex situation, consult a Tennessee-licensed elder-law attorney. This guide is informational only and is not legal advice.
What usually happens
Tennessee doesn't publish a fill-in form, so the trust has to be drafted to TennCare's requirements, and an elder-law attorney quotes $1,000–$2,500 to research and draft it. Once it's signed, you take it to the bank, where the branch has never opened one of these and says no.
Meanwhile the month is running out. In Tennessee, coverage can't start before the month the trust is funded, so a month that slips is another month of private-pay nursing care at $9,429–$10,038.
This applies when the person who needs care has gross monthly income over Tennessee's income cap of $2,982, whether you're their child, their spouse, or a professional helping them.
Free: the questions to ask a Tennessee bank before your first visit
7 questions for a five-minute phone call, so you find out whether a branch knows how to open this account before you make the drive. Emailed now, then 4 short follow-ups over the next 10 days — then we stop.
The trustee does not have to be an attorney or a professional fiduciary. Managing a Qualified Income Trust is an operational job, not a legal one: open the account, move the applicant's income through it each month, and pay out only what TennCare allows — the same short list of tasks every month.
What the trustee does each month
- Deposits the applicant's income — Social Security, pension, and any other named sources — into the dedicated trust account.
- Pays out only the amounts TennCare permits: typically the applicant's personal-needs allowance of $70/month, any spousal allowance, and the applicant's share of medical and care costs.
- Keeps simple records of what went in and what came out, so the trust stays compliant and Medicaid has no reason to question it.
For the full list of payments TennCare allows, with the source for each, see what the trust can pay for in Tennessee.
Name a backup trustee
Many families name a successor trustee when they set the trust up, so that if the first trustee cannot continue, the trust keeps running without interruption. Either way the Tennessee setup is the same — see the step-by-step setup and what to say at the bank.
Whoever you name will need this
The trustee is the one who opens the account — and most banks have never seen this type of trust before. Free one-pager: the questions to ask before that first visit, emailed now. Then 4 more short emails over the next 10 days — then we stop.