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TITLE 16 HEALTH AND SAFETY DELAWARE ADMINISTRATIVE CODE 55 Transfer of assets penalties do not apply to income placed in a Miller trust if the provisions of the trust state that income placed in the trust will be used for medical care provided to the individual (nursing facility or home care provided under a community-based waiver, etc.). When such payments are made, the individual is considered to have received fair market value for the income placed in the trust, up to the amount actually paid for medical care provided to the individual and to the extent that the payments purchased care at fair market value. NOTE: PAYMENTS (e.g. patient pay) FOR MEDICAL CARE SHOULD BE MADE IN MONTHLY INTERVALS TO AVOID TRANSFER OF ASSETS PENALTIES. Funds placed in a Miller trust can be transferred for the sole benefit of a spouse (medical care for the community spouse). Transfer penalties do not apply to assets transferred to a spouse. Transfer of property penalties can be avoided if the trust states that the property can only be used for the benefit of the individual's spouse while the trust exists, and that the trust cannot be terminated and distributed to any other individuals or entities for any other purpose. Funds placed in the trust that are used for the benefit of the individual,(administrative fees for the trust, income tax owed by the trust, attorney's fees, food, clothing, or mortgage payments) are exempt from transfer of assets penalties if they reflect fair payments for the items or services that were purchased. NOTE: There is NO provision for the use of funds in this manner to be deducted in calculations for the Patient Pay Amount (PPA). When income placed in the trust exceeds the amount paid out of the trust for medical services or other items or services that benefit the individual, the excess income is subject to penalties under the transfer of assets provisions. 20400.11.5 Treatment Of Payments Made From A Miller Trust Payments from the trust may still count as income to the individual under the State Medicaid Plan. Payments made from a Miller Trust directly to the individual are counted as income to the individual, provided the individual could use the payments for food, clothing, or shelter. This rule applies whether or not the payments actually are used for these purposes, as long as there are no legal impediments that prevent the individual from using the payments this way. Any payments made by the trustee to purchase something in kind for the individual also can count as income to the individual. In kind income include actual food, clothing, or shelter, or something the individual can use to obtain one of these. For example, if the trustee makes a mortgage payment for the individual, that payment is a shelter expense and counts as income. However, medical expenses paid on behalf of the individual are not counted as income to the individual. 20400.11.6 Post-Eligibility Treatment of Income Not Placed in a Miller Trust Income that is retained by the individual is subject to post-eligibility rules. See post eligibility rules in Section 20600. 20400.11.7 Post-Eligibility Treatment of Income Placed in a Miller Trust Although income placed in a Miller trust is not counted for Medicaid eligibility purposes, the income is counted for post- eligibility purposes. Post-eligibility rules are applied to all income entering the trust. 20400.11.8 Post-Eligibility Treatment of Payments Made From a Miller Trust If not used for medical care costs, payments from the Miller trust may be counted for eligibility purposes. However, payments made from a Miller trust are not considered for post-eligibility purposes. Post-eligibility rules have already been applied to all income entering the trust through the patient pay calculation. 20400.11.9 Treatment of Miller Trust and Spousal Impoverishment All funds placed in a Miller trust are subject to the post-eligibility treatment of income rules, including funds applicable to spousal impoverishment. 20400.12 When Application Of The Trust Provisions Would Cause Undue Hardship 20400.12.1 Undue Hardship 20400.12.2 Burial Trusts 20400.12.1 Undue Hardship Undue hardship exists when application of the trust provisions would deprive the individual of medical care such that his/her life would be endangered. Undue hardship also exists when application of the trust provisions would deprive the individual of food, clothing, shelter or other necessities of life. 20 DE Reg. 117 (08/01/16) 20400.12.2 Burial Trusts A burial trust is a trust established by an individual for the purpose of paying, at some point in the future, for the various expenses associated with the individual's funeral and burial. Irrevocable prepaid burial trusts that do not exceed $15,000 are exempted under the undue hardship policy. 11 DE Reg. 1051 (02/01/08)