2020 Colorado Revised Statutes
Title 15 - Probate, Trusts, And Fiduciaries
Article 14. Persons Under Disability - Protection
Section 15-14-412.7. Income trusts - limitations.

(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 ofthe following criteria:

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

2. 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.

3. The entire corpus of the trust, or as much of the corpus as may be distributed eachmonth 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;

4. The trust provides that deductions may be made from the monthly trust distributionto 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:

1. A monthly personal needs allowance;

2. 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.;

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

4. Any other deduction provided by rules of the medical services board, includingrules concerning posteligibility treatment of income for home- and community-based services clients;

5. The trust provides that, upon the death of the beneficiary or termination of the trustduring 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;

6. 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.

Source: L. 2000: Entire part R&RE, p. 1812, § 1, effective January 1, 2001 (see § 15-17103). L. 2006: IP(3)(d) and (3)(d)(II) amended, p. 2003, § 52, effective July 1.

Editor's note: This section is similar to former § 15-14-409.7 as it existed prior to 2001. 15-14-412.8. Disability trusts - limitations. (1) A disability trust within the meaning of this section is a trust that is established for an individual under sixty-five years of age who is disabled, as such term is defined in Title XIX of the federal "Social Security Act", 42 U.S.C. sec. 1382c (a)(3), as amended, consists of assets of the individual, and is established for the purpose or with the effect of establishing or maintaining the individual's resource eligibility for medical assistance.

(2) A disability trust is not valid for the purpose of establishing or maintaining a person's resource eligibility for medical assistance unless the trust meets all of the following criteria:

1. The trust is funded by assets of an individual under age sixty-five who is disabled asdefined in 42 U.S.C. sec. 1382c (a)(3), as amended, and which is established for the benefit of such individual by the individual, the individual's parent, the individual's grandparent, the individual's guardian, or by the court.

2. The trust provides that, upon the death of the beneficiary or termination of the trustduring the beneficiary's lifetime, whichever occurs sooner, the department of health care policy and financing receives any amount remaining in the trust up to the total medical assistance paid on behalf of the individual.

3. The sole lifetime beneficiaries of the trust are the individual for whom the trust isestablished 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.

3. A disability trust is not valid for the purpose of establishing or maintaining eligibilityfor any category of public assistance other than medical assistance.

4. No disability trust shall be valid unless the department of health care policy andfinancing, or its designee, has reviewed the trust and determined that the trust conforms to the requirements of this section and any rules adopted by the medical services board pursuant to section 25.5-6-103, C.R.S.

Source: L. 2000: Entire part R&RE, p. 1813, § 1, effective January 1, 2001 (see § 15-17103). L. 2006: (4) amended, p. 2003, § 53, effective July 1. L. 2017: (2)(a) amended, (HB 171280), ch. 230, p. 894, § 1, effective May 23.

Editor's note: This section is similar to former § 15-14-409.8 as it existed prior to 2001.