What Happens to a Miller Trust When the Beneficiary Dies in Arkansas?
When the beneficiary of a Arkansas Miller Trust dies, money left in the trust does not pass to the family like an ordinary inheritance. On the applicant's death the Income Trust terminates and the trustee pays Arkansas DHS an amount equal to the medical assistance DHS paid to, or on behalf of, the applicant since the trust was created. If the applicant received Medicaid in more than one state, the remaining funds are divided among those states in proportion to what each state paid. The trustee coordinates the exact payoff amount with the DHS caseworker and DHS's Medicaid estate-recovery process (Medical Services Policy Manual §H-600); Arkansas does not publish a separate residuary remittance form. Only the balance remaining after Arkansas DHS is reimbursed passes to the other beneficiary named on the DCO-9938 form. The trustee should resolve the State's claim before distributing any balance and keep proof of payment in the trust file. Because most of the applicant's income flows through the trust each month to pay for care, the balance remaining at death is usually small. This guide is informational only and is not legal advice.
Why the money doesn't just pass to the family
A Miller Trust is the mechanism that let the applicant qualify for Medicaid despite income over the CMS January 2026 figures cap of $2,982/month. In exchange, the trust is set up so that whatever remains when the beneficiary dies is first used to reimburse the state for the care Medicaid paid for. That is a condition of using the trust, not a penalty.
Why the trust is irrevocable
A Qualified Income Trust only works if it is irrevocable: the applicant cannot pull the money back out for other purposes, and the trustee can only make the distributions Arkansas DHS allows. That is what lets the diverted income go uncounted for eligibility.
What's usually left
In practice the balance at death is often small. Most of the applicant's income flows into the trust and back out again each month to pay the personal-needs allowance and the applicant's share of care — so the trust is a pass-through, not a place where money piles up.
Common questions
- Who gets the money left in a Arkansas Miller Trust after the beneficiary dies?
- On the applicant's death the Income Trust terminates and the trustee pays Arkansas DHS an amount equal to the medical assistance DHS paid to, or on behalf of, the applicant since the trust was created. If the applicant received Medicaid in more than one state, the remaining funds are divided among those states in proportion to what each state paid. The trustee coordinates the exact payoff amount with the DHS caseworker and DHS's Medicaid estate-recovery process (Medical Services Policy Manual §H-600); Arkansas does not publish a separate residuary remittance form. Only the balance remaining after Arkansas DHS is reimbursed passes to the other beneficiary named on the DCO-9938 form. The trustee should resolve the State's claim before distributing any balance and keep proof of payment in the trust file.