What Happens to a Miller Trust When the Beneficiary Dies in South Carolina?
When the beneficiary of a South Carolina Miller Trust dies, money left in the trust does not pass to the family like an ordinary inheritance. The Income Trust terminates upon the beneficiary's death (DHHS Form 905, paragraph 5.05). The trustee must promptly notify SCDHHS and may not use or distribute any remaining trust funds until SCDHHS's reimbursement claim is resolved. The trustee then pays SCDHHS — the named Secondary Beneficiary — an amount up to the total previously un-reimbursed medical assistance paid for the beneficiary, and only the balance remaining after SCDHHS is reimbursed in full passes to the beneficiary's estate. If the trust account was a joint account, any survivorship rights take effect only after the trust's obligations to SCDHHS are satisfied. The forms do not print a specific remittance address; confirm the current instructions with SCDHHS at termination. 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 SCDHHS 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 South Carolina Miller Trust after the beneficiary dies?
- The Income Trust terminates upon the beneficiary's death (DHHS Form 905, paragraph 5.05). The trustee must promptly notify SCDHHS and may not use or distribute any remaining trust funds until SCDHHS's reimbursement claim is resolved. The trustee then pays SCDHHS — the named Secondary Beneficiary — an amount up to the total previously un-reimbursed medical assistance paid for the beneficiary, and only the balance remaining after SCDHHS is reimbursed in full passes to the beneficiary's estate. If the trust account was a joint account, any survivorship rights take effect only after the trust's obligations to SCDHHS are satisfied. The forms do not print a specific remittance address; confirm the current instructions with SCDHHS at termination.