§ 15-16-913 — Trust for beneficiary with disability - definitions

Colorado § 15-16-913

• Jurisdiction: Colorado
• Title 15: Probate,
• Art.: Trust Administration

Text

(1) As used in
this section, unless the context otherwise requires:

(a) Beneficiary with a disability means a beneficiary of a first trust who the
special-needs fiduciary believes may qualify for governmental benefits based on
disability, whether or not the beneficiary currently receives those benefits or is an
individual who has been adjudicated an incapacitated person.

(b) Governmental benefits means financial aid or services from a state,
federal, or other public agency.

(c) Special-needs fiduciary means, with respect to a trust that has a
beneficiary with a disability:

(I) A trustee or other fiduciary, other than a settlor, that has discretion to
distribute part or all of the principal of a first trust to one or more current
beneficiaries;

(II) If no trustee or fiduciary has discretion under subparagraph (I) of this
paragraph (c), a trustee or other fiduciary, other than a settlor, that has discretion to
distribute part or all of the income of the first trust to one or more current
beneficiaries; or

(III) If no trustee or fiduciary has discretion under subparagraph (I) or (II) of
this paragraph (c), a trustee or other fiduciary, other than a settlor, that is required
to distribute part or all of the income or principal of the first trust to one or more
current beneficiaries.

(d) Special-needs trust means a trust the trustee believes would not be
considered a resource for purposes of determining whether a beneficiary with a
disability is eligible for governmental benefits.

(2) A special-needs fiduciary may exercise the decanting power described in
section 15-16-911 over the principal of a first trust as if the fiduciary had authority to
distribute principal to a beneficiary with a disability subject to expanded
distributive discretion if:

(a) A second trust is a special-needs trust that benefits the beneficiary with
a disability; and

(b) The special-needs fiduciary determines that exercise of the decanting
power will further the purposes of the first trust.

(3) In an exercise of the decanting power under this section, the following
rules apply:

(a) Notwithstanding section 15-16-911 (3)(b), the interest in the second trust
of a beneficiary with a disability may:

(I) Be a pooled trust as defined by medicaid law for the benefit of the
beneficiary with a disability under 42 U.S.C. sec. 1396p (d)(4)(C), as amended; or

(II) Contain payback provisions complying with reimbursement requirements
of medicaid law under 42 U.S.C. sec. 1396p (d)(4)(A), as amended.

(b) Section 15-16-911 (3)(c) does not apply to the interests of the beneficiary
with a disability.

(c) Except as affected by any change to the interests of the beneficiary with
a disability, the second trust, or if there are two or more second trusts, the second
trusts in the aggregate, must grant each other beneficiary of the first trust
beneficial interests in the second trusts which are substantially similar to the
beneficiary's beneficial interests in the first trust.

Legislative History

Source: L. 2016: Entire part added, (SB 16-085), ch. 228, p. 881, � 1, effective August 10. L. 2017: IP(3)(a) amended, (SB 17-294), ch. 264, p. 1392, � 32, effective May 25.