§ 30-4-10-43 — Beneficiary with a disability

Indiana § 30-4-10-43

• Jurisdiction: Indiana
• Art. 4: TRUST CODE
• Ch. 10: Uniform Trust Decanting Act

Text

(a) This section applies to any trust that has
a beneficiary with a disability, without limitation, whenever a
special-needs fiduciary for the trust determines that the beneficiary
with a disability may qualify for governmental benefits based on a
disability, whether the beneficiary currently receives those benefits or
has been adjudicated to be an incapacitated person under IC 29-3.
(b) As used in this section, "governmental benefits" means financial
aid or services from a state, federal, or other public agency.
(c) As used in this section, "special-needs fiduciary" means:
(1) 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;
(2) if no trustee or fiduciary has discretion under subdivision (1),
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 (1) or
more current beneficiaries; or
(3) if no trustee or fiduciary has discretion under subdivisions (1)
and (2), 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 (1) or more current beneficiaries;
with respect to a trust that has a beneficiary with a disability.
(d) As used in this section, "special-needs trust" means a trust that
the trustee reasonably believes would not be considered a resource for
purposes of determining whether a beneficiary with a disability is
eligible for governmental benefits.
(e) A special-needs fiduciary may exercise the decanting power
under section 41 of this chapter 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 or other trust that
benefits the beneficiary with a disability; and
(2) the special-needs fiduciary determines that an exercise of the
decanting power will further the purposes of the first trust.
(f) In an exercise of the decanting power under this section, the
following rules apply:
(1) Except as provided in section 41(f)(2) of this chapter, 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 U.S.C.
1396p(d)(4)(C), as amended and in effect on July 1, 2022; or
(B) contain payback provisions complying with reimbursement
requirements of Medicaid law under 42 U.S.C. 1396p(d)(4)(A),
as amended and in effect on July 1, 2022.
(2) Section 41(f)(3) of this chapter does not apply to the interests
of the beneficiary with a disability.
(3) Except as affected by a change to the interests of the
beneficiary with a disability, the second trust, or if there are two
(2) 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

As added by P.L.161-2022, SEC.3.