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Should we deposit property sale proceeds into a Miller trust or checking account?

Should we deposit property sale proceeds into a Miller trust or checking account?

Q: What happens to the money in a Miller trust when the person dies?

Upon the death of the individual who established a Miller Trust, any remaining funds in the trust are generally used to reimburse the state for Medicaid expenses incurred during their lifetime. This means the funds cannot be distributed to beneficiaries until the state is reimbursed.

Q: How do you know if a trust is irrevocable?

A trust is considered irrevocable if the grantor cannot modify or terminate it without the consent of the beneficiaries. This is usually stated explicitly in the trust document. If the trust allows changes or revocation by the grantor, it is likely revocable.

Q: Is a Miller trust irrevocable?

Yes, a Miller Trust is generally considered irrevocable. Once established, the grantor cannot alter or dissolve the trust. This characteristic helps ensure that the trust's assets are managed according to Medicaid rules and cannot be accessed by the grantor for personal use.

Q: Are Miller trusts revocable or irrevocable?

Miller trusts are irrevocable. This means that once the trust is created, the grantor cannot change its terms or reclaim the assets. This structure is designed to help individuals qualify for Medicaid while preserving certain income for their care.

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?

Category: Trusts
Date: 04/07/2025
State: Delaware

Answer:

A Miller Trust allows certain income to be exempt from Medicaid calculations, ensuring that the trust can pay for a person's nursing home care without losing eligibility. Upon the death of the trust holder, any remaining funds in the trust are used to reimburse the state for Medicaid expenses incurred. In Delaware, funds from a deceased person's estate, including property sale proceeds, may also be subject to reimbursement to the state.

Given this, it is advisable to consult with a local attorney experienced in elder law for specific guidance on how to handle the proceeds from the property sale. They can help determine whether it is best to deposit the funds into the Miller Trust or the regular checking account, considering the implications for Medicaid reimbursement.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What happens to a trust when the last person dies?

When the last person named in a trust dies, the trust typically terminates. The assets held in the trust are then distributed according to the terms outlined in the trust document. If there are no specific instructions, the assets may be subject to probate, where a court oversees the distribution according to state laws.