Colorado Medicaid Income Trust (Miller Trust) 2026: Do You Need One?

In 2026, a Colorado applicant for Medicaid long-term care whose income is over $2,982 a month, but under the region's limit, needs an income trust to qualify. That applies to nursing home care, Home and Community-Based Services (HCBS) and the Program of All-Inclusive Care for the Elderly (PACE). Colorado calls it an income trust; the same thing is also known as a Qualified Income Trust (QIT) or a Miller Trust. A Colorado Medicaid income trust is an irrevocable trust that holds the applicant's income above the cap each month, pays it out under fixed rules, and names the state as a beneficiary.1,2

In This Guide

• Do You Need a Colorado Medicaid Income Trust?
• Who an Income Trust Can Help: The 2026 Regional Limits
• What the Trust Covers, and What Goes Into It
• How to Set Up a Colorado Income Trust
• Where to Send the Trust, and What to Report Later
• What the Trustee Pays Out Each Month
• What the Trust Can't Pay For
• If a Spouse Still Lives at Home
• What Happens When the Trust Ends
• Common Mistakes With a Colorado Income Trust
• Frequently Asked Questions
• Next Steps
• Learn More

Do You Need a Colorado Medicaid Income Trust?

Colorado is an income-cap state. For nursing-facility and HCBS waiver coverage under Health First Colorado, the state's Medicaid program run by the Colorado Department of Health Care Policy and Financing (HCPF), the 2026 income standard is $2,982 a month. Colorado's $2,982 limit is 300% of the 2026 SSI Federal Benefit Rate of $994 a month.1,3

Compare the applicant's gross monthly income, before anything is taken out, to those two lines:

• At or under $2,982 a month: the income test is met without a trust.
• Over $2,982 but under the applicant's regional limit: Colorado requires an irrevocable income trust, with the income above the cap deposited into it each month.1
• At or over the regional limit: Colorado's rule says an income trust is valid only when income is below that regional figure, so a trust is not the route. Talk to the eligibility site before setting one up.4

Once the trust exists, the trustee follows the monthly rules covered below. If you're still working out whether Mom or Dad meets the rest of Colorado's tests, start with our guide to Colorado Medicaid income and asset limits.

Who an Income Trust Can Help: The 2026 Regional Limits

Under 10 CCR 2505-10 § 8.100.7.E.6.a, an income trust is valid only if the applicant's gross monthly income is above the 300% SSI limit and below the average cost of private long-term care institution care in the region where the applicant lives and intends to stay. HCPF recalculates those regional averages every calendar year, and the four regions follow the Bureau of Economic Analysis regions.4

HCPF Operational Memo OM 25-073 sets the 2026 figures, effective January 1, 2026. HCPF is the only publisher of these dollar amounts, so check the memo for the current year before relying on them.4

The region that counts is the one where the applicant lives and intends to remain, not where the family lives. A parent in El Paso County (Region III) has a 2026 limit of $9,780.17 a month; the same income in Denver (Region I) is measured against $11,522.44.4

What the Trust Covers, and What Goes Into It

HCPF's Irrevocable Income Trust Agreement form says the trust establishes and maintains income eligibility for long-term care services: long-term care institution care, Home and Community-Based Services (HCBS), and the Program of All-Inclusive Care for the Elderly (PACE). The form states the trust "shall not be effective for establishing or maintaining income eligibility for any other category of public assistance." For the full range of what Medicaid pays for, see what Medicaid covers.2

The trust holds income only. Under the form, it consists of the member's pension income, Social Security and other monthly income, plus income that builds up in the trust, and the trustee may not accept any of the member's resources. Savings and other resources stay out of it. Earned income, if the member has any, may be kept outside the trust, but it reduces what the trustee can pay out to the member.2

One practical snag: Social Security won't deposit benefits directly into a trust account. HCPF's instructions say the trustee then transfers the amount left after the patient payment into the trust account by the end of the month.2

How to Set Up a Colorado Income Trust

HCPF publishes its own form for income trusts, the Irrevocable Income Trust Agreement. Download it with its instructions from HCPF's Instructions for Submitting Trusts page.5

HCPF asks for a document that expressly grants the power to establish the trust, so read the power of attorney or court order early, before an application deadline is close.

Where to Send the Trust, and What to Report Later

Under 10 CCR 2505-10 § 8.100.7.E.7, the trustee must submit the trust documents and records to the eligibility site and to HCPF. The eligibility site forwards any trust filed with an application or at redetermination to HCPF, and then decides Medicaid eligibility based on HCPF's determination of the trust's effect.4

HCPF's Trust Policy and Recoveries Section takes trusts by four channels:4

• Online webform: HCPF's preferred method, on its trusts page.
• Email: Medicaid.trusts@state.co.us
• Fax: 303-866-35524
• Mail: HCPF, Attn: Trust Policy and Recoveries Section, 303 E. 17th Avenue, Denver, CO 80203

Once the trust is in place, the trustee has continuing duties. The trustee must tell HCPF about a change of trustee address or a change of trustee within 30 calendar days. The rule requires an annual accounting of trust income and spending, plus an annual statement of trust assets, to go to the eligibility site or HCPF on reasonable request or on any change of trustee. HCPF's form goes further: it commits the trustee to send both documents to both the eligibility site and HCPF every year, and on any change of trustee or termination.4

What the Trustee Pays Out Each Month

The monthly rules depend on where the member gets care.

In a nursing facility

Each month, the trustee distributes the entire amount of income transferred into the trust. Any money left after the allowable deductions goes only toward the nursing facility's cost of care, up to the Medicaid reimbursement rate, and income not distributed builds up in the trust.2

The two HCPF sources list the deductions differently, so read both:

• The rule (10 CCR 2505-10 § 8.100.7.E.6.a) says the allowable deductions "include only" the personal needs allowance, spousal income payments and approved PETI payments.2
• HCPF's trust form (Section 5.01(b)) has the trustee pay the facility the patient payment and pay the member the personal needs allowance "along with any other applicable monthly income adjustments." The form names the Monthly Income Allowance for the community spouse (part of Medicaid's spousal impoverishment protections), Family Dependent Allowance, Home Maintenance Allowance, mandatory income tax withheld, mandatory garnishments repaying a federal assistance overpayment, Medicare Part B during the first and second month in the nursing facility, Medicare penalties for failure to elect coverage, ongoing Medicare Part D premiums, and nursing facility PETI-approved expenses.2

Under the form, these amounts are computed on the member's AP-5615 form, and distributions can't exceed the income deposited that month. In 2026, Colorado's personal needs allowance for a nursing-facility resident who isn't a veteran or a veteran's widow(er) is $110.36 a month; see our guide to the Colorado personal needs allowance for the lower veterans' figure.2,1

At home or in PACE

For a Colorado income-trust member getting HCBS, 10 CCR 2505-10 § 8.100.7.E.6.a limits the trustee's monthly distribution to 300% of the SSI limit, $2,982 a month in 2026; income above that stays in the trust. For figuring Individual Cost Containment or the member payment, the member's monthly income is treated as 300% of the SSI limit. HCPF's form applies the same 300%-level distribution to a member in HCBS or enrolled in PACE who isn't living in a long-term care institution, and it bars any distribution for the member's room and board.2,1 Earned income kept outside the trust reduces what the trustee can pay out to the member.2 For which programs those are, see our guide to Colorado HCBS waivers.

What the Trust Can't Pay For

Colorado lets an income trust keep back no more than $20.00 a month for its own expected costs, such as bank charges, for both nursing facility and HCBS members.2

Nothing else may be paid from the trust. Under the rule, the expenses that can't be paid include, but aren't limited to:2

• trustee fees
• attorney fees and costs, including the cost of setting up the trust
• accountant fees
• court fees and costs, and fees for guardians ad litem
• funeral expenses
• past-due medical bills and other debts

HCPF's form says the same thing and adds that the trustee isn't entitled to compensation or reimbursement beyond the $20.00 provision. The rule's one exception is narrow: trustee fees ordered before April 1, 1996 may continue until the trust ends.2

If a Spouse Still Lives at Home

The trust interacts with Colorado's spousal protections. Both HCPF lists of monthly deductions make room for the at-home spouse: the rule allows spousal income payments, and the form names the Monthly Income Allowance for the community spouse.2 The size of that allowance, and how much the at-home spouse can keep in savings, is covered in our guide to Colorado spousal impoverishment rules.

If a spouse is still at home, set the trust up early and confirm with the eligibility site how the trust and the spouse's income allowance are sequenced in your case.

What Happens When the Trust Ends

A Colorado income trust ends when the member dies, or when the trust is no longer needed for Medicaid eligibility in Colorado. Under the rule, HCPF then receives everything left in the trust, up to the total Medicaid paid on the member's behalf. HCPF's instructions say that "Generally, this is the entire balance of the trust."4

• Deadline: the remaining amount and an accounting of the trust are due to HCPF within three months after the death or termination. HCPF may grant an extension if a written request is submitted within two months of the termination.4
• Who to contact: the trustee contacts HCPF on the member's death or loss of eligibility, preferably by email at medicaid.trusts@state.co.us.4
• The accounting: a copy of the trust account's bank statements is often enough.4
• Order of payment: under HCPF's form, no expenses may be paid from the trust and no one is entitled to payment from it until HCPF has been reimbursed. Any balance after that goes to the member if living, or to the member's estate.4

Colorado also runs a Medical Assistance Estate Recovery Program under 10 CCR 2505-10 § 8.100.5.D.1 How it works is covered in our guide to Colorado Medicaid estate recovery.

Common Mistakes With a Colorado Income Trust

• Setting up a trust when income is over the regional limit. Colorado's rule makes an income trust valid only below the region's average private-pay rate, so check the table above first.4
• Using the wrong region. The limit follows the county where the applicant lives and intends to remain.4
• Putting savings into the trust. The trustee may not accept the member's resources; the trust holds income only.2
• Waiting for Social Security to deposit into the trust. It won't, so the trustee has to move the money each month.2
• Paying the lawyer or the trustee from the trust. Trustee fees and attorney fees, including the cost of setting the trust up, can't come out of it.2
• Paying rent or board from the trust for someone at home. HCPF's form bars distributions for room and board.2
• Signing under a power of attorney that doesn't expressly allow it. HCPF wants proof that the signer has express authority to establish the trust.5
• Forgetting the 30-day report. A new trustee, or a trustee's new address, has to be reported to HCPF within 30 calendar days.4

Next Steps

1. Find the applicant's county in the regional table and compare gross monthly income to $2,982 and to that region's 2026 limit.4,1
2. Check that whoever will sign has a power of attorney or court order that expressly allows creating the trust.5
3. Complete HCPF's Irrevocable Income Trust Agreement with Schedule A, and open the trust bank account.
4. Apply for coverage online through Colorado PEAK, or by paper application mailed or dropped off at the county office. HCPF's Member Contact Center is 1-800-221-3943 (State Relay: 711). Our guide on how to apply for Colorado Medicaid walks through the application.1
5. Send the trust to the eligibility site and to HCPF's Trust Policy and Recoveries Section.4

Learn More

Find personalized help setting up a Colorado income trust for Medicaid at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.