Medicaid Qualifying Trust

Medicaid Qualifying Trusts are intended for those who have an income greater than what Medicaid allows, yet who may not have income sufficient for long term care.

An Income or Medicaid Qualifying Trust provides a means for individuals with monthly income greater than $2,199 in 2017 to receive Health First Colorado (Medicaid) assistance with the cost of nursing home care or home care. To qualify, the individual must have resources of less than $2,000 (couples $3,000) and income less than $5,991 per month (this number may be slightly flexible based on county of residence).

A Medicaid Qualifying Trust is established by completing the Qualifying Trust Declaration and submitting it to the county department of human services with the Health First Colorado application. The county human services will submit the Qualifying Trust application to the Colorado Department of Human Services for approval. Individuals may use the services of an attorney, but that is not required. Attorney fees can longer be paid out of the Qualifying Trust, but other funds may be used.

The Qualifying Trust application requires:

  • Name of settler (person wishing to establish the trust)
  • Relationship of the settler to the Health First Colorado applicant
  • Notarized signatures of the trustee and settler
  • Source and gross amount of monthly income

Note: If the settler is the Health First Colorado applicant, s/he 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 on the bank account does not need to be changed, although it is preferably that the account be noted as a “trust account for the benefit of the payee”. Direct deposit of government benefit checks is preferred.)

Each month, funds will be distributed to the individual’s nursing home facility to a maximum of the applicable Health First Colorado reimbursement rate. The only additional disbursements permitted for nursing home residents are a personal needs allowance of $81.95, trust maintenance expenses of $20, and if pre-approved, a spousal allowance. Remaining funds must be retained and accumulated in the income trust.

If a Qualifying Trust is used for a person who is receiving Home and Community Based Services (including residence in an assisted living that is paid by Medicaid), Consumer Directed Attendant Support Services (CDASS) or Program for All-Inclusive Care of the Elderly (PACE), the individual is allowed to keep $2,199. Additional funds must be made available to the State of Colorado upon the death of the individual and/or put in a separate bank account with the State of Colorado as the beneficiary.

The Trust will terminate upon the death of the Health First Colorado recipient, or if the individual becomes ineligible for Health First Colorado 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 (Health First Colorado), 1560 Grant Street, Denver, CO 80203. Following review, Medicaid will instruct the trustee to forward any remaining funds to them, and the bank account should be closed.