C.R.S.
Section 25.5-6-102
Court-approved trusts
- transfer of property for persons seeking medical assistance for nursing home care
- undue hardship
- legislative declaration
(1)
The general assembly hereby finds, determines, and declares that:(a)
The state makes significant expenditures for nursing home care under the “Colorado Medical Assistance Act”;(b)
A large number of persons do not have enough income to afford nursing home care, but have too much income to qualify for state medical assistance, a situation popularly referred to as the “Utah gap”;(c)
Some persons in the Utah gap, through innovative court-approved trust arrangements, have become qualified for state medical assistance, thereby increasing state medical assistance expenditures;(d)
It is therefore appropriate to enact state laws which limit such court-approved trusts in a manner that is consistent with Title XIX of the federal “Social Security Act”, 42 U.S.C. sec. 1396 et seq., as amended, and which provide that persons who qualify for assistance as a result of the creation of such trusts shall be treated the same as any other recipient of medical assistance for nursing home care;(e)
In enacting this section, the general assembly intends only to limit certain court-approved trusts and court-approved transfers of property. It is not the general assembly’s intent to approve or disapprove of privately created trusts or private transfers of property made under the same or similar circumstances.(2)
The county department shall verify that an applicant for medical assistance for nursing home care, pursuant to the provisions of this title, meets applicable eligibility criteria for assistance other than those set forth in subsection (3) of this section. Upon verification, for eligibility purposes and in accordance with subsection (3) of this section, the county department shall make a determination of the status of any court-approved trust established for or court-approved transfer of property made by or for the applicant.(3)
Intentionally left blank —Ed.(a)
If a person who applies for medical assistance for nursing home care would be deemed ineligible for assistance as a result of deeming a court-approved trust established for the applicant as a medicaid qualifying trust or as a result of deeming property in the court-approved trust as an improper transfer of assets, the person’s application shall, nonetheless, be treated as a case of undue hardship and the person shall be eligible for medical assistance for said care if the establishment of the court-approved trust meets the following criteria:(I)
The applicant’s monthly gross income from all sources, without reference to the court-approved 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;(II)
The property used to fund the trust shall be limited to monthly unearned income owned by the applicant, including any pension payment;(III)
The applicant and the state medical assistance program shall be the sole beneficiaries of the trust. 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, shall be distributed each month for expenses related to the beneficiary’s nursing home care that are approved under the 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. Deductions may be distributed from the trust to the same extent deductions from the income of a nursing home resident who is not a trust beneficiary are allowed under the medical assistance program, which shall include the following:(A)
A monthly personal needs allowance;(B)
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)
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; and(D)
Any other deduction provided in the rules of the state department.(IV)
Upon the death of the beneficiary, a remainder interest in the corpus of the trust shall pass to the state agency responsible for administering the state medical assistance program;(V)
The trust shall not be subject to modification by the beneficiary or the trustee unless otherwise provided by this section or section 15-14-412.5, C.R.S.(b)
For the purposes of this subsection (3), “medicaid qualifying trust” shall have the same meaning as set forth in Title XIX of the federal “Social Security Act”, 42 U.S.C. sec. 1396a(k).(4)
The state board shall adopt rules as are necessary for the implementation of this section and as are necessary to comply with federal law. In addition, the state department shall amend the state medical assistance plan in a manner that is consistent with the provisions of this section.(5)
This section shall take effect January 1, 1992, and shall apply to any court-approved trust established for or court-approved transfer of property made by or for a protected person applying for or receiving medical assistance for nursing home care pursuant to the provisions of this title, on or after said date; except that a court-approved trust created before said date that does not comply with this section shall be modified to comply with this section no later than July 1, 1992, before which time the court-approved trust or court-approved transfer of property to a trust shall not render the protected person ineligible for medical assistance.(6)
The provisions of this section shall not apply if federal funds are not available for persons who would qualify for medical assistance as a result of a court-approved trust that meets the criteria set forth in this section.(7)
This section shall apply to trusts established or transfers of property made prior to July 1, 1994. The provisions set forth in sections 15-14-412.6 to 15-14-412.9, C.R.S., and any rules adopted by the state board pursuant to section 25.5-6-103 shall apply to trusts established or property transferred on or after that date.
Source:
Section 25.5-6-102 — Court-approved trusts - transfer of property for persons seeking medical assistance for nursing home care - undue hardship - legislative declaration, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-25.5.pdf (accessed Oct. 20, 2023).
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