What Happens to a Miller Trust When the Beneficiary Dies in New Jersey?
When the beneficiary of a New Jersey Miller Trust dies, money left in the trust does not pass to the family like an ordinary inheritance. The QIT terminates when the primary beneficiary ceases to receive New Jersey Medicaid. Upon termination/death, the trustee notifies the NJ Department of Human Services / DMAHS and distributes remaining trust property to the Division (or successor) up to the total Medicaid expenditures paid on the beneficiary's behalf, reduced by any prior recoveries, payable to 'Treasurer, State of NJ' within 30 days of notification. No provision may repay other creditors first, and the trust may not pay burial expenses; only what remains after the State is paid goes to any named distributee. DMAHS estate-recovery rules still apply to assets outside the QIT. 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 DMAHS 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 New Jersey Miller Trust after the beneficiary dies?
- The QIT terminates when the primary beneficiary ceases to receive New Jersey Medicaid. Upon termination/death, the trustee notifies the NJ Department of Human Services / DMAHS and distributes remaining trust property to the Division (or successor) up to the total Medicaid expenditures paid on the beneficiary's behalf, reduced by any prior recoveries, payable to 'Treasurer, State of NJ' within 30 days of notification. No provision may repay other creditors first, and the trust may not pay burial expenses; only what remains after the State is paid goes to any named distributee. DMAHS estate-recovery rules still apply to assets outside the QIT.