§ 15-14-412.7 — Income trusts - limitations

Colorado § 15-14-412.7

• Jurisdiction: Colorado
• Title 15: Probate,
• Art.: Persons Under Disability - Protection

Text

(1) An income trust within the
meaning of this section is a trust established for the benefit of an individual that
consists only of pension income, social security, and other monthly income to the
individual and accumulated income in the trust and that is established for the
purpose or with the effect of establishing or maintaining income eligibility for
certain medical assistance.

(2) An income trust shall not be effective for establishing or maintaining
income eligibility for any category of public assistance other than nursing home
care or home- and community-based services.

(3) In order to establish or maintain income eligibility, an income trust shall
meet all of the following criteria:

(a) The assets used to fund the trust are limited to any monthly unearned
income received by the applicant, including any pension payment;

(b) The sole lifetime beneficiaries of the trust are the person for whom the
trust is established and the state medical assistance program. After the death of
the person for whom the trust is created or after the trust is terminated during the
beneficiary's lifetime, whichever occurs sooner, no person is entitled to payment
from the remainder of the trust until the state medical assistance agency has been
fully reimbursed for the assistance rendered to the person for whom the trust was
created.

(c) The entire corpus of the trust, or as much of the corpus as may be
distributed each month without violating federal requirements for federal financial
participation, is distributed each month for expenses related to nursing home care
or home- and community-based services for the beneficiary that are approved
under the state medical assistance program; except that an amount reasonably
necessary to maintain the existence of the trust and to comply with federal
requirements may be retained in the trust;

(d) The trust provides that deductions may be made from the monthly trust
distribution to the same extent that deductions from the income of a nursing home
resident or home- and community-based services client are allowed under the state
medical assistance program, articles 4, 5, and 6 of title 25.5, C.R.S., for nursing
home residents and home- and community-based services clients who are not trust
beneficiaries. Allowable deductions include the following:

(I) A monthly personal needs allowance;

(II) With respect to nursing home residents only, payments to the
beneficiary's community spouse or dependent family members as provided and in
accordance with Title XIX of the federal Social Security Act, 42 U.S.C. sec. 1396r-5, as amended, and section 25.5-6-101, C.R.S.;

(III) Specified health insurance costs and special medical services provided
under Title XIX of the federal Social Security Act, 42 U.S.C. sec. 1396a (r), as
amended;

(IV) Any other deduction provided by rules of the medical services board,
including rules concerning posteligibility treatment of income for home- and
community-based services clients;

(e) The trust provides that, upon the death of the beneficiary or termination
of the trust during the beneficiary's lifetime, whichever occurs sooner, the state
agency administering the state medical assistance program receives all amounts
remaining in the trust up to the total medical assistance paid on behalf of the
individual;

(f) The applicant's monthly gross income from all sources, without reference
to the trust, exceeds the income eligibility standard for medical assistance then in
effect but is less than the average private pay rate for nursing home care for the
geographic region in which the applicant lives.

Legislative History

Source: L. 2000: Entire part R&RE, p. 1812, � 1, effective January 1, 2001 (see � 15-17-103). L. 2006: IP(3)(d) and (3)(d)(II) amended, p. 2003, � 52, effective July 1.