HF 2295 (LSB 5223YH (3) 88)

HOUSE FILE 2295

BY  UPMEYER

A BILL FOR

An Act relating to transfer between trusts for persons with disabilities. 
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 12I.3, subsection 1, Code 2020, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  g.  Any funds retained in a medical assistance special needs trust pursuant to chapter 633C, or in a supplemental needs trust pursuant to chapter 634A, may be transferred to the Iowa ABLE savings plan trust account of a designated beneficiary who is also the beneficiary of any such trust, in accordance with the applicable provisions of chapters 633C, 634A, and this chapter.
    Sec. 2.  Section 633C.2, Code 2020, is amended to read as follows:
   633C.2  Disposition of medical assistance special needs trusts.
   Any income or assets added to or received by and any income or principal retained in a medical assistance special needs trust shall be used in accordance with a standard that is no more restrictive than specified under federal law. All distributions from a medical assistance special needs trust shall be for the sole benefit of the beneficiary to enhance the quality of life of the beneficiary, and the trustee shall have sole discretion regarding such disbursements to ensure compliance with beneficiary eligibility requirements.  Any funds retained in the medical assistance special needs trust of a beneficiary who is also a designated beneficiary as defined in section 12I.1 may be transferred to the Iowa ABLE savings plan trust account of the designated beneficiary in accordance with this chapter and chapter 12I.  Any distinct disbursement in excess of one thousand dollars shall be subject to review by the district court sitting in probate. The department shall adopt rules pursuant to chapter 17A for the establishment and disposition of medical assistance special needs trusts in accordance with this section.
    Sec. 3.  Section 634A.2, Code 2020, is amended by adding the following new subsection:
   NEW SUBSECTION.  8.  Any funds retained in a supplemental needs trust of a beneficiary who is also a designated beneficiary as defined in section 12I.1 may be transferred to the Iowa ABLE savings plan trust account of the designated beneficiary in accordance with this chapter and chapter 12I.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to trusts for persons with disabilities.
   The bill provides that any funds retained in a medical assistance special needs trust or in a supplemental needs trust of a beneficiary with a disability who is also a designated beneficiary of an Iowa ABLE saving plan trust account may be transferred to the Iowa ABLE savings plan trust account of the designated beneficiary in accordance with the provisions of the Code chapters applicable to the specific trusts.
   The disabilities expenses savings plan trust is also known as the Iowa ABLE savings plan trust which was established as a qualified ABLE program under section 529A of the Internal Revenue Code. The purpose of ABLE savings accounts is to encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life and to provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program, the federal supplemental security income program, and other sources. ABLE savings accounts allow eligible individuals the opportunity to save and fund a variety of qualified disability expenses without endangering eligibility for certain benefits such as Medicaid and supplemental security income.