EXEMPT RESOURCES

Resources that shall be exempt and not counted toward the resource limit for an individual or married couple include: A. The vehicle with the highest value is exempt if it is used for the transportation of the client or a member of the household. B. Household goods and personal effects found in or on the primary residence, that the client uses on a regular basis. The client needs household goods for maintenance, use, and occupancy of the premises as a home. This also includes personal effects which are ordinarily worn or carried by the client, or items that have an intimate relation to the client. This does not include effects that the client holds because of the value or as an investment, which are countable as personal property as outlined in Section 3.520.742. C. A home in which a client and his or her spouse have an ownership interest and that serves as the client's principal place of residence. This property includes the shelter in which the client resides, the land on which the residence is located, and related outbuildings. 1. The home is not a countable resource regardless of its value. However, when there is an income producing property located on or adjacent to the home property, the income producing resource shall not qualify under the home exemption unless assessed collectively with the principal home. 2. When a client or his or her spouse requires long-term medical care that is outside the client's county of residence, the home continues to be exempt so long as there is intent for the client and/or spouse to return to the home at the conclusion of medical treatment. 3. When a client requires care in a long-term care facility, the home continues to be exempt so long as there is intent for the client to return to the home. a. This intent to return home applies to the home in which the client or spouse was living prior to being admitted to the facility or to the replacement home. Such intent is documented by the following: 1) A written statement from the client indicating the intent to return home for any reason; or, 2) A written statement from the client's spouse, legal fiduciary, doctor, or authorized representative indicating the client's intent to return home. b. An arrangement by the client for occupancy of the home by another person, either on a rental basis, rent free, or in exchange for home maintenance, during a period of temporary absence shall not affect the home property exemption. 4. The home of an OAP-C client, as defined in Section 3.530.1, shall be exempt as a resource during the period of commitment. 5. If a client's home can no longer be excluded due to a change in his or her principal place of residence, the equity value of the property shall count as a resource. D. Part or all of the value of property may be exempt if it is essential to the self- support of the client. To determine whether property is producing income or being used in a trade or business, the county department shall obtain a copy of the most recent tax returns from the client. If a return has not yet been filed, obtain a current estimate of income and a copy of the previous year's return. Property used for self-support activities include: 1. Property used in self-employment. a. To be considered a valid trade or business as self-employment, the activity shall be: 1) Currently ongoing rather than in the stage of preparation or inactivity; and, 2) Intended to make a profit. b. The cash and convertible assets considered necessary for use in the trade or business shall be excluded. c. If property has been but is not currently in use, the exemption for such property shall continue for twelve (12) months if there is a reasonable expectation that the use of the property will resume within that time. The exemption is for twenty-four (24) months where non-use is due to a disabling condition. 2. Property owned by the client that is necessary to perform a job for wages, such as tools, safety equipment, or uniforms. If property has been but is not currently in use the exemption for such property shall continue for twelve (12) months if there is a reasonable expectation that the use of the property will resume within that time. The exemption is for twenty-four (24) months where non-use is due to a disabling condition. 3. Non-business property used to produce goods necessary for the client's daily activities. a. A maximum of six thousand dollars ($6,000) of the equity value of such property shall be exempt as a resource. Any equity value in excess of $6,000 shall be a countable resource. b. Examples of this type of property include land which is used to produce vegetables or livestock only for personal consumption in the client's household, and personal property necessary to perform that function (e.g., a garden tractor, a boat used for subsistence fishing), but do not include vehicles, boats used for leisure or recreation, or other special vehicles. c. If property has been but is not currently in use, the exemption for such property shall continue for twelve (12) months if there is a reasonable expectation that the use of the property will resume within that time. The exemption period shall be twenty-four (24) months where nonuse is due to a disabling condition. 4. Non-business, income-producing property shall be exempt, but the income shall be countable. a. If a client owns non-business, income-producing property, a maximum of six thousand dollars ($6,000) of the equity value of such property is an exempt resource, as long as the property produces a net annual income of at least six percent (6%) of the excluded equity. If the equity value of such income-producing, non- business property exceeds $6,000, only the equity value above $6,000 will be counted as a resource. If there is more than one potentially exempt property, the rate-of-return requirement applies individually to each. However, the total combined exemption for all such properties shall not exceed $6,000. b. “Non-business” means that the property is not used in a trade or business as defined in Section 3.520.76. Non-business, income- producing property may include but is not limited to houses or apartments for rent and land other than home property. c. If non-business, income-producing property is not producing net income of at least six percent (6%) of the excluded equity, the entire equity value is counted as a resource. However, the exemption for up to $6,000 of the property's equity may continue if the property is earning less than 6% due to circumstances beyond the client's control (e.g., crop failure, illness, etc.), and there is a reasonable expectation that, within twenty-four (24) months, the property will again produce a 6% return. 5. A permit, license, or other similar authority granted by a governmental agency to engage in an income-producing activity is not a countable resource. E. Proceeds from fire or casualty insurance shall be considered exempt to the extent that they are used to restore or replace an exempt resource. This exemption shall be allowed for up to three (3) months for restoration or replacement of exempt personal property and six (6) months for restoration or replacement of exempt real property from the date the client receives such sums. 1. Establishing eligibility for the duration of the replacement exemption requires: a. Obtaining appropriate documentation to verify the amount of proceeds and date they were received; and, b. Obtaining the client's signed statement verifying that the proceeds will be used for restoration or replacement of exempt property. 2. The county department must contact the client upon the expiration of the allowable time period to verify that restoration or replacement has occurred. Restoration or replacement shall be considered to occur when payment for such is made or contracted in writing to be made. 3. When the allowable time period ends, proceeds in excess of payments made or contracted to be made must be counted as a resource in the month following the month in which the time period expired, unless good cause for an extension is determined by the county department using the prudent person principle. F. Proceeds from sale of the home property, relocation payments, or condemnation awards from a governmental agency shall be considered exempt to the extent that they are used to purchase or build a replacement home. This exemption is allowed for up to six (6) months from the date the client receives such sums. Proceeds of a home sale are the net payments received by the seller after satisfaction of all actual encumbrances and sales expenses. 1. Establishing eligibility for and the duration of the replacement exemption requires: a. Obtaining appropriate documentation to verify the amount of proceeds and date they were received; and, b. Obtaining the client's signed statement verifying that the proceeds will be used for restoration or replacement of exempt property. 2. The client must be contacted upon the expiration of the allowable time period to verify that replacement has occurred. Replacement shall be considered to occur when payment for such is made or contracted in writing to be made. 3. When the allowable time period ends, proceeds in excess of payments made or contracted to be made must be counted as a resource in the month following the month in which the time period expired, unless good cause for an extension is determined by the county department using the prudent person principle. G. Burial trusts are considered as follows: 1. For all trusts, the agreement does not have to be preexisting and need not have been purchased in Colorado. 2. An irrevocable burial trust cannot be terminated, sold, or transferred. An irrevocable burial trust plus any accrued interest is exempt if all of the following criteria are met: a. The trust is made with a Federally insured bank or savings and loan association, or with a trust company under supervision of the State banking commissioner; b. The trust is irrevocable during the lifetime of the client and is to be paid by the trustee only upon death of the client for the purpose of burial expense; c. The trust provides for payment of the trust funds without limitation as to place of burial or provider of related services. In any case, however, the client is not precluded from indicating a preference as to place of burial or provider of related services; and d. The trustor and the beneficiary of the trust cannot be one and the same. If he or she is both the trustor and the beneficiary, the value exceeding $1500 is a countable resource. 3. A revocable burial trust can be terminated, sold, or transferred. A revocable burial trust is exempt if the value of the trust does not exceed one thousand five hundred dollars ($1,500). Any interest on the exempt $1,500 is also exempt. Any amount over $1,500 is a countable resource. H. Prepaid burial contracts are exempt if any of the following conditions are met: 1. The prepaid burial contract is irrevocable. 2. The prepaid burial contract is revocable and does not exceed one thousand five hundred dollars ($1,500). Any amount in excess of $1,500 shall be a countable resource. a. Only the paid-up amount of the contract, not the face value, is taken into consideration; b. Any interest on the exempt $1500 is also exempt. I. The value of burial spaces required to meet the burial needs of the immediate family as well as brothers, sisters, and spouses of those persons, even if not living in the home. A burial space includes: 1. Burial plot; 2. Gravesite; 3. Crypt; 4. Mausoleum; 5. Casket; 6. Urn; 7. Niche; 8. Other repository customarily and traditionally used for the decedent's bodily remains; 9. Vaults; 10. Headstones, markers, or plaques; 11. Arrangements for the opening and closing of the gravesite; and, 12. Contracts for care and maintenance of the gravesite. J. Any retroactive SSI or Social Security retirement or disability benefits still remaining after the month of receipt shall be exempt as a resource for nine months following the month they are received. K. An income tax refund, including the Property Tax/Rent/Heat Credit (PTC) rebate, shall be exempt in the month received. Any remaining balance shall be counted as a resource after twelve (12) months. L. Monies from a bona fide loan are exempt in the month received. Any remaining balance shall be counted as a resource in the following month(s). M. Monies specifically placed in an Achieving a Better Life Experience (ABLE) Account, as described in the Achieving a Better Life Experience Act of 2014, 26 U.S.C. Section 529a (2018).