Miller Trust in Delaware: How a Qualified Income Trust Works

Your parent's Social Security and pension together total $3,200 a month. Delaware's Medicaid income cap for long-term care is $2,982. Without a Miller Trust, that $218 overage means automatic denial — no home care, no assisted living coverage, no nursing facility benefits through DSHP-Plus.

Delaware is one of the strict income cap states. There is no option to spend down excess income on medical bills to qualify. The only path forward is a Qualified Income Trust, commonly called a Miller Trust.

What a Miller Trust Does

A Miller Trust is an irrevocable trust that receives the portion of your parent's income that exceeds the Medicaid cap. The trust effectively makes that excess income "invisible" to the eligibility determination, allowing your parent to meet the income threshold.

The trust is not optional. It is a mandatory legal instrument for any Delaware Medicaid long-term care applicant whose gross monthly income exceeds $2,982. DMMA will not process the application without an executed QIT document and a corresponding trust bank account on file.

How to Set One Up

The setup process involves three components:

1. Draft the trust agreement. An elder-law attorney prepares a notarized, irrevocable QIT agreement. The trust must name the Medicaid applicant as the sole beneficiary during their lifetime. Upon the beneficiary's death, the trust must name the State of Delaware (specifically DHSS) as the primary remainder beneficiary up to the amount of Medicaid benefits paid.

2. Open a dedicated trust bank account. Using the parent's Social Security Number, open a bank account titled in the name of the trust. This must be a separate, dedicated account — not a personal checking or savings account.

3. Monthly deposits. Each month, all gross income exceeding the cap must be deposited into the trust account. These funds can only be used for the applicant's medical and care costs, personal needs allowance, and Medicare premiums.

Typical costs:

• Attorney drafting fees: $500 to $2,500
• Monthly bank maintenance: $5 to $25
• Setup timeline: 3 to 10 business days to execute the trust and establish the bank account

Critical Timing

The Miller Trust must be established before you submit the Medicaid financial application. Not during processing. Not after approval. Before.

If you submit the application while your parent's income exceeds the cap and no QIT is on file, DMMA issues an automatic denial. You then have to establish the trust, resubmit, and restart the 45-day determination clock.

For families dealing with a hospital discharge or care crisis, this timing creates real pressure. The trust drafting, bank account opening, and application preparation need to run in parallel with the clinical assessment (UAI) to avoid weeks of delay.

Who Needs to Be the Trustee

The trustee manages the trust account — making the monthly deposits, paying authorized expenses, and keeping records for DMMA audits. The trustee can be the applicant (if they have capacity), an agent under a Durable Power of Attorney, or a court-appointed guardian.

If your parent has already lost cognitive capacity and has no executed Power of Attorney, you cannot legally establish a Miller Trust on their behalf. In that case, you must first petition the Court of Chancery for guardianship — a process that can take 2 to 6 months and costs $3,000 to $7,000 or more.

This is why getting a Durable Personal Power of Attorney executed while a parent still has cognitive capacity is the single most important step in Delaware eldercare planning. Without it, the Miller Trust (and by extension, Medicaid eligibility) gets locked behind a lengthy court proceeding.

What Happens to the Trust After Death

Upon the Medicaid recipient's death, Delaware's estate recovery program is entitled to reimbursement from the remaining trust balance, up to the total amount of Medicaid long-term care benefits paid on behalf of the deceased. Any funds remaining after state reimbursement pass to named secondary beneficiaries.

The Delaware Home Care Guide includes a Miller Trust setup checklist, a financial pre-screening calculator to determine whether your parent exceeds the income cap, and step-by-step instructions for coordinating trust establishment with the Medicaid application timeline.

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