How to Set Up a Miller Trust in Delaware for Medicaid Eligibility

Delaware is a strict income-cap state. If your parent's gross monthly income exceeds $2,485 — even by a dollar — they're automatically disqualified from long-term care Medicaid. There's no "medically needy" spend-down option for excess income the way some states allow. The only workaround 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 applicant's income each month. By routing income through the trust rather than directly to the individual, DMMA treats the applicant's income as meeting the $2,485 cap. The trust then distributes the funds according to strict Medicaid rules.

It's a legal mechanism, not a loophole. Delaware's Medicaid regulations explicitly authorize it.

Requirements for a Valid Delaware Miller Trust

The trust document must satisfy several non-negotiable conditions:

Irrevocable. Once established, the terms cannot be changed. This is critical — a revocable trust doesn't qualify.

Separate trustee. Someone other than the Medicaid applicant must serve as trustee. This is typically the adult child managing the parent's affairs, but it can be any trusted individual. The trustee manages the monthly deposits and disbursements.

Dedicated bank account. The trust must have its own checking account, opened under the trust's name. No commingling with personal funds. Most local banks can open a trust checking account, though some branch staff may be unfamiliar with QITs specifically.

State payback provision. The trust document must name the State of Delaware as the primary beneficiary. Upon the applicant's death, any funds remaining in the trust go to reimburse Delaware for Medicaid benefits paid, up to the total amount of benefits received. Whatever is left after that reimbursement goes to the applicant's estate or named secondary beneficiaries.

The Monthly Funding Cycle

This is where families often stumble. The Miller Trust isn't a one-time setup — it requires action every single month.

Each month, the applicant's income must be deposited directly into the trust bank account. Social Security, pensions, retirement distributions — all gross income goes in. The trustee then uses the funds for permitted items, including:

1. $75 Personal Needs Allowance — the nursing home resident's pocket money for toiletries, clothing, and small personal expenses
2. Spousal income allowance — if the community spouse's own income falls below the Monthly Maintenance Needs Allowance floor ($2,705 for 2026), the difference is transferred to them
3. Medical insurance premiums — Medicare Part B, supplemental insurance
4. Patient liability — the remainder goes to the nursing facility or care provider

The trust account should carry a near-zero balance at the end of each month. Excess accumulation signals a problem to DMMA.

Timing Is Everything

The trust must be executed and the bank account opened and funded within the same calendar month the applicant is requesting Medicaid coverage to begin. If your parent needs Medicaid effective October 1, the trust must be signed, the account opened, and the first deposit made in October.

Missing this window means no Medicaid coverage for that month. The family pays private-pay rates for any month where the trust wasn't properly funded.

What It Costs

Attorney fees for drafting the Miller Trust document typically run $200–$2,500 in Delaware, depending on the complexity of the estate and whether the trust is part of a broader Medicaid planning engagement. The trust bank account usually carries minimal monthly fees ($5–$25). Compared to the alternative — paying $14,494 per month in private nursing home costs — the setup cost is negligible.

Do You Need an Attorney?

The trust must satisfy Delaware's irrevocability and state-payback requirements. Have a Delaware elder-law attorney draft or review it because a document DMMA rejects can mean a denied Medicaid application and months of private-pay exposure while you fix it.

For families who want to understand the full process before engaging an attorney — and potentially save hours of billable time by arriving with organized financials and a clear plan — the Delaware Medicaid Long-Term Care & Asset Protection Guide includes a Miller Trust checklist and a bank script to help navigate the account setup process.

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