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Colorado Gerontological Society and Senior Answers and Services
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Income Trusts for Medicaid no longer need court approval

Denver, CO. An Income or Medicaid Qualifying Trust provides a means for individuals with monthly income greater than $1656 in 2002 to receive Medicaid assistance with the cost of nursing home care or home care. To qualify, the individual must have resources of less than $2000 (couples $3000) and income less than $4,424 per month.

Effective July 1, 1996, it is no longer mandatory that the Medicaid Qualifying Trust be court approved, and Medicaid Trusts may be established with or without the services of an attorney.(Attorney fees may no longer be paid out of the Medicaid Trust, however other funds may be used.) The Medicaid applicant may establish his or her own trust if capable of doing so, or a guardian, conservator or agent under a power of attorney may file it for them.

If the individual decides to proceed without the services of an attorney, a form to establish an Income Trust may be obtained from the County Department of Social Services or other community agencies.

The Qualifying Trust application requires:
- Name of settlor (person wishing to establish the trust)
- Relationship of the settlor to the Medicaid applicant
- Notarized signatures of the trustee and settlor
- Source and gross amount of monthly income
Note:: If the settlor is the Medicaid applicant, he or she must sign a consent form. Others attach proof of appointment such as Powers of Attorney or Letters of Guardianship or Conservatorship.

Once established, all monthly income from pensions, investments and Social Security must be deposited into the trust account. (The name of the payee does not need to be changed, and direct deposit is preferred.) Each month, funds will be distributed to the individual's nursing home facility to a maximum of the applicable Medicaid reimbursement rate. The only additional disbursements permitted are a personal needs allowance of $50, trust maintenance expenses of $20, and if pre-approved, a spousal allowance. Remaining funds must be retained and accumulated in the income trust.

The trust will terminate upon the death of the Medicaid recipient, or if the individual becomes ineligible for Medicaid benefits in Colorado. When the trust terminates, the trustee must send a full accounting of the income and expenditures of the trust to the Colorado Department of Health Care Policy and Financing (Medicaid), 1575 Sherman, Denver, CO 80203. Following review, Medicaid will instruct the trustee to forward any remaining funds to them, and the bank account should be closed.

Questions regarding closure of trusts may be directed to Mark Servers
at 303.866.2993.

Eileen Doherty, MS, is the Executive Director of the Colorado Gerontological Society and Senior Answers and Services. She is an expert in gerontological issues facing older adults. She has worked in the areas of policy, clinical practice, and education for more than 20 years. She can be reached at 303-333-3482.