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5 Ways Miller Trust Bank Accounts Are Different

If you plan to open a Miller trust bank account, you need to  understand how these types of accounts differ from traditional bank accounts.

Difference #1:
The bank accounts opened to fund a miller Trust operate more like a “representative account” for the payment of disabled person’s expenses rather than a typical asset-type trust account.  This is an income only trust. Because there are no significant assets placed in the trust there are none of the usual trust management issues.

Difference #2
For income tax purposes, the Miller Trust bank account is considered a “grantors trust”.  As such, there is no separate trust tax ID number required.  The bank should use the Social Security number of the grantor for the account.

Unfortunately, some bank personnel confuse the setup of an income only trust with that of an asset trust.  They will insist that you obtain a separate tax ID number.  If the bank insists on a separate tax ID number, you incur potentially costly delay waiting for the tax number to be issued.

We even had experiences at the same bank branch where one bank representative knew how the bank should open the trust account and others didn’t.  It can be very frustrating.

The Miller Trust bank account must be titled as a “trust account.”  For example, “the John Smith Income Trust”, where John Smith is the grantor of the trust (the grantor is the person for whom the trust is established).

Only the person named as the trustee (the person responsible for managing the trust account) is authorized to sign checks.  No other individual can write checks on the trust account, not even the grantor.  The trustee will receive the monthly statements. Because the State may ask for an accounting, you should safeguard the monthly statements along with an itemized account of how the money is spent on the patient’s behalf.

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