What is a Miller Trust?

What is a Miller Trust? article image

A Miller Trust is an Irrevocable Income Trust that is required when an individual is applying for Delaware’s Long Term Care Medicaid program and the applicant receives more monthly income than the State of Delaware allows. Income is defined as Social Security, pension, rental and annuity payments

The State of Delaware is known as an “income cap state”. This means if an applicant’s monthly gross income exceeds $1,957.50 (2020), the applicant is not eligible for Medicaid without additional planning. The resolution for the applicant’s income eligibility is to create and fund an Irrevocable Qualified Income Trust, also known as a Miller Trust.

The applicant is the Grantor (creator) of the Trust and they assign a Trustee (manager) of the Trust. Every month all income is deposited to a bank account in the name of the Miller Trust. The Trustee then uses the income in the Miller Trust to pay for the applicant’s cost of care within a facility, or household expenses if they are receiving care in their home.

The Miller Trust is not a preplanning tool and is not necessary to create and fund in advance. Contrary to popular belief, the Miller Trust is also not a tool that is used to shelter assets from the costs of long term care. The Miller Trust should be created and funded in the same month the applicant is applying for Medicaid benefits.