• Troyer & Good, PC

Managing the Miller Trust Bank Account

Updated: Feb 18, 2019



A Miller Trust bank account must be established when the Miller Trust agreement has been prepared and properly signed. You as the Trustee must then take the original Trust Agreement to the bank to open the Miller Trust checking account. The bank can make a copy of the Trust but you should not relinquish possession of the original Trust. The bank account must receive only the income of the Settlor. The Settlor is the person who needs Medicaid.


Savings or other assets may not be placed or held in the Miller Trust bank account. Income for another person, even a spouse, may not be placed or held in the Miller Trust account. The bank account should be titled as a trust account. For example, “John Smith, Trustee of The Qualified Income Trust of Jane Doe.”


A Miller Trust is a “grantor trust,” which means that, for tax reporting purposes, the trust’s finances are the same as the Settlor’s finances. Therefore, the bank must use the Social Security Number of the Settlor.


You must be the only person authorized to sign checks or withdraw funds from the Miller Trust account. No other person may write checks or withdraw money from the account, not even the Settlor. Checks should have the following account title: “John Smith, Trustee of The Qualified Income Trust of Jane Doe.”


You should receive the monthly statements for the Miller Trust account. You must keep these statements, along with an itemized account of how the Settlor’s money is spent for review and consideration by Family and Social Services Administration (FSSA) and any other state agencies which may be providing benefits for the Settlor.


FSSA is a department of the State of Indiana.  FSSA processes and oversees Medicaid applications and determines if an applicant is eligible for Medicaid. It is not recommended that you obtain a bank cash card, debit card, or credit card for the Miller Trust account.


The rules relating to authorized expenditures for a Miller Trust account are varied, complex, and subject to revision or amendment at any time. Therefore, to reduce the risk that an unauthorized expenditures might be made, you should only withdraw funds by means of a check drawn on the account.


You must retain and maintain all records relating to the Miller Trust arrangement and transfer the records to any successor Trustee. These records include, but are not limited to, the account agreement, bank statements, copies of cancelled checks, receipts, invoices or bills, billing and/or service logs or time records, and any and all items that relate to the Miller Trust arrangement. These records will likely be used to prepare accountings and to respond to inquiries from FSSA.


The Settlor must keep his/her regular checking account in addition to the Miller Trust account. The Settlor’s income must first be deposited into the regular checking account. The amount over the Special Income Limit (SIL) standard must then be transferred from the regular account to the Miller Trust account each month. (For 2019, the SIL is $2,313.) A check for this same amount must then be written from the Miller Trust account to the nursing home before the last day of each month.


Every time the Settlor’s income increases, the amount you must transfer to the Miller Trust account (and pay to the nursing home) must increase by the same amount. Because the Miller Trust account will typically have less than 100% of the funds needed to pay the monthly nursing home bill (the patient liability), you will most likely be writing two checks to the nursing home – one from the regular checking account and one from the Miller Trust account.


After the funds are deposited to the Miller Trust bank account, you may write checks for authorized payments from the account. Miller Trust funds may be used only for approved expenditures allowed by Medicaid rules. These expenditures include:

  • Nursing home bill (patient liability)

  • Monthly health insurance premium. Premiums for indemnity policies that provide income replacement rather than coverage for incurred medical costs are not allowed

  • Spousal allowance

  • Dependent or family member allowance

  • Prescription co-payments

  • Over the counter medications not covered by Medicaid coverage

You must never put any money or property, other than the Settlor’s monthly income which exceeds the SIL, into the Miller Trust account. Co-mingling is prohibited.


Any money remaining in the Miller Trust bank account upon termination of the Trust is paid to the State of Indiana up to the total amount of Medicaid benefits paid on behalf of the Settlor for medical care. Any remaining funds after payment to the State of Indiana are paid to the remainder beneficiaries as specified in the Miller Trust.


Funds may not be paid to the remainder beneficiaries until the State of Indiana provides a written statement that the payment amount it received satisfies the debt owed to the state. When the time arises to terminate the Miller Trust, you should take the following actions:

  1. Stop depositing funds into the Miller Trust bank account

  2. Notify FSSA that a “change in eligibility” has occurred within ten (10) days after the Trust should terminate

  3. Confirm that all expected and paid expenses have cleared the Miller Trust account before proceeding to close the account.

See our previous posts The Basics of a Miller Trust, How to Set Up a Miller Trust, and Acting as Trustee of a Miller Trust.

Fort Wayne, Indiana attorneys offering services in estate planning, Wills, Trusts, estate and trust administration, probate, elder law, Medicaid, asset protection, and guardianship.

​© 2020 by Madyson Shannon