What happens to the funds in a Millers Trust when the trustor dies?

Full Question:

We have a Millers trust account for my father and he has now passed away. We have settlement on his property coming up and am not sure if we should deposit the monies from the sale of the property into the Miller trust or his regular checking account. What do you advise?
04/07/2011   |   Category: Trusts   |   State: Delaware   |   #24591


As you may know, a Miller Trust makes Social Security and other income exempt from calculations of income and resources if the state is reimbursed from the trust for Medicaid expenses upon the recipient's death. In this situation, the applicant assigns all of their non-exempt income to an irrevocable trust. The trust pays out the maximum allowable amount of income to the applicant, withot losing their eligibility. This income is paid directly to the Medicaid recipient's nursing home and the excess income stays in the trust. Medicaid picks up the tab for the portion of the nursing home bill that exceeds the maximum acceptable income and any income left in the trust is used to pay back the state upon the death of the recipient. Such an income diversion trust is also now called a Qualifying Income Trust (QIT).

Upon the person's death, any funds remaining in the Miller Trust are transferred to the State of Delaware as reimbursement for the amounts paid out by the State as Medicaid benefits.

If other money becomes part of your father's estate, then it may also be subject to being paid as reimbursement.

It would be recommended that you consult with a local attorney experience in Elder law issues for specific guidance.

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