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Law Offices of Ronald W. Rutz
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January 10, 2000: Hospital Admittance; Assets and Trust Qualification

Q: Why did the hospital force me to sign several medical documents when I was recently admitted?

A: This is a very common misunderstanding. Since the hospital receives Medicare and Medicaid money, federal law requires the hospital to tell all incoming patients about the availability of medical directives that Colorado law allows. The hospital can not force a person to sign these documents as a precondition for admittance.

The term "advance directives" refers to documents, such as Medical Durable Powers of Attorney, Living Wills (authorizes life support machines to be shut off), and CPR directives (non-resuscitation instructions). Along with a Will and a personal/business power of attorney, everyone should consider having a Medical Power of Attorney anyway, and if shutting off the machine is important to a person, the Living Will.

And the hospital forms are just as good as those which an attorney would prepare.

Q: Is it correct that if I set up a trust for a child with physical or mental problems, social services can take all of those assets, or at least count them to disqualify the child from programs that he or she would otherwise receive?

A: If the trust assets come from a third party (not from the trust beneficiary either directly or indirectly), and if the beneficiary has "no rights" in the trust (such as the right to receive income or have the trust pay certain expenses such as rent), and if the person setting up the trust or the trust itself has no legal obligations that are required to be fulfilled on behalf of the child (an example would be court ordered child support or other benefits), and finally if the distribution by the trustee is completely discretionary as to both income and principal, the trust is safe from social services under current Colorado law. (Yes folks, that all is one sentence).

To add one extra layer of legal armor, many attorneys not only make distributions completely discretionary but add instructions that the trustee must do things such as actively search to find public and private resources and not make any distributions if those funds could be available.

Thus, properly set up, those trusts can provide financial assistance and then when the trust ends, there will be something left to pass on to others after the trust "safety net" is no longer needed.

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