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Miller Trust Lawyer in Millsboro

When Is a Miller Trust Needed?

To qualify for long term care Medicaid a person (the applicant) must establish financial eligibility. The financial eligibility test has two parts: income eligibility and asset eligibility. In some states (like Delaware, but not Maryland), the person applying for benefits cannot have income that exceeds a certain threshold, called an income cap. In 2021, the income cap in the State of Delaware is $1,985.

In states where an income cap is not imposed, the income test simply requires that the applicant’s monthly income is insufficient to cover the monthly cost of care. If a person requires skilled nursing care in Southern Delaware or on the Eastern Shore of Maryland, they can anticipate $10,768-$12,288 as an average monthly cost of care.

Many Delaware applicants have more monthly income than $ 1,985 (the income cap) but cannot cover the cost of their care. A Miller Trust, which is also referred to as a Qualified Income Trust, allows applicants with income falling within this range to qualify for long term care Medicaid.

How Does a Miller Trust Satisfy the Income Test?

A Miller Trust should only be established at the time that the applicant is applying for benefits. Like all trusts, a Miller Trust is established by a trust agreement, a document which details how the funds in the trust will be managed. The Trust may be established by the applicant, or the applicant’s agent under a durable power of attorney, if it specifies that the agent has the authority to establish trusts for the applicant’s benefit.

If an applicant is incapacitated and doesn’t have a durable power of attorney that authorizes an agent to establish trusts, court authorized guardianship may be required so that a guardian can establish the Miller Trust for the applicant. The Trustee (manager) of the Trust is oftentimes the authorized agent or guardian. The Trust is irrevocable, meaning it cannot be changed after it is established.

Once the trust agreement is executed, a bank account is opened in the name of the Trust. All of the applicant’s monthly income must be deposited into the Miller Trust bank account. Each month the Trustee will use the monthly income in the Miller Trust account to satisfy the applicant’s financial responsibilities. When the applicant is approved for benefits, Medicaid will establish the patient pay responsibility.

This is the amount that the applicant will pay to the facility where they are receiving care each month as their contribution to their cost of care. The patient pay responsibility will cause most of the funds in the Miller Trust to be depleted each month. Any leftover funds should be used for extra needs the applicant has which are not covered by Medicaid. Examples include grooming services, meals out, and entertainment. It is important that the funds not accumulate in the Trust.

What Happens to Funds in the Miller Trust After the Applicant Dies?

When the applicant dies, the Miller Trust requires that any money left in the trust account reimburse the State for the value of benefits provided to the applicant during their lifetime. The estate recovery department is responsible for detailing the value of the benefits. If the trust balance is below the value of services, recovery is limited to the balance of the Trust account (as well as any other estate assets).

Does the Miller Trust Protect Assets?

No. The Miller Trust is only used to satisfy the income eligibility test where the State imposes an income cap. If an applicant has assets in excess of the asset threshold, other strategies and tools are available to help satisfy this requirement.

Explore Your Medicaid Planning Options with a Trusted Millsboro AttorneySussex Countyat our number (302) 240-9969 or fill out our online contact form.


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