What Happens to a Miller Trust When the Beneficiary Dies in Indiana?
When the beneficiary of a Indiana Miller Trust dies, money left in the trust does not pass to the family like an ordinary inheritance. On the primary beneficiary's death the trust terminates and the trustee distributes any remaining trust property to the Indiana Family and Social Services Administration (or its successor) up to the total medical assistance Indiana paid on the beneficiary's behalf; only the excess after FSSA is reimbursed goes to the settlor's named distributees. Funds remaining in a Qualified Income Trust/Miller Trust as of the date of death are expressly subject to the State's claim through Indiana's Medicaid Estate Recovery Program. Payment is made to the 'Treasurer, State of Indiana' at the Medicaid Estate Recovery Program, Indiana FSSA, 402 W. Washington St., W451, MS 27, Indianapolis, IN 46204. The trustee should resolve the State's claim before distributing any balance and keep proof of payment. 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 FSSA 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 Indiana Miller Trust after the beneficiary dies?
- On the primary beneficiary's death the trust terminates and the trustee distributes any remaining trust property to the Indiana Family and Social Services Administration (or its successor) up to the total medical assistance Indiana paid on the beneficiary's behalf; only the excess after FSSA is reimbursed goes to the settlor's named distributees. Funds remaining in a Qualified Income Trust/Miller Trust as of the date of death are expressly subject to the State's claim through Indiana's Medicaid Estate Recovery Program. Payment is made to the 'Treasurer, State of Indiana' at the Medicaid Estate Recovery Program, Indiana FSSA, 402 W. Washington St., W451, MS 27, Indianapolis, IN 46204. The trustee should resolve the State's claim before distributing any balance and keep proof of payment.