§ 45a-545m — Trust for beneficiary with disability.

(a) As used in this section: (1) “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 such benefits or is an individual who has been adjudicated incapable. (2) “Governmental benefits” means financial aid or services from a state, federal or other public agency. (3) “Special-needs fiduciary” means, with respect to a trust that has a beneficiary with a disability: (A) A trustee or other fiduciary, other than a settlor, who has discretion to distribute part or all of the principal of a first trust to one or more current beneficiaries; (B) if no trustee or fiduciary has discretion under subparagraph (A) of this subdivision, a trustee or other fiduciary, other than a settlor, who has discretion to distribute part or all of the income of the first trust to one or more current beneficiaries; or (C) if no trustee or fiduciary has discretion under subparagraphs (A) and (B) of this subdivision, a trustee or other fiduciary, other than a settlor, who is required to distribute part or all of the income or principal of the first trust to one or more current beneficiaries. (4) “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. (b) A special-needs fiduciary may exercise the decanting power under section 45a-545k 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: (1) A second trust is a special-needs trust that benefits the beneficiary with a disability; and (2) the special-needs fiduciary determines that exercise of the decanting power will further the purposes of the first trust. (c) In an exercise of the decanting power under this section, the following rules apply: (1) Notwithstanding subdivision (2) of subsection (b) of section 45a-545k , the interest in the second trust of a beneficiary with a disability may: (A) Be a pooled trust as defined by Medicaid law for the benefit of the beneficiary with a disability under 42 USC 1396p(d)(4)(C), as amended from time to time; or (B) contain payback provisions complying with reimbursement requirements of Medicaid law under 42 USC 1396p(d)(4)(A), as amended from time to time. (2) Subdivision (3) of subsection (b) of section 45a-545k shall not apply to the interests of the beneficiary with a disability. (3) 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, shall grant each other beneficiary of the first trust beneficial interests in the second trusts in accordance with section 45a-545k or 45a-545 l , as the case may be. (4) A special-needs fiduciary shall not exercise the decanting power with respect to a trust established pursuant to and in compliance with 42 USC 1396p(d)(4)(A) or (C) in a manner that would impair the state's claim on the death of the beneficiary for (A) medical assistance provided, and (B) any claims for which this state would have valid claims against the estate of the deceased beneficiary not previously paid or reimbursed.

Legislative History

(P.A. 24-104, S. 13.) History: P.A. 24-104 effective January 1, 2025.