Text: HSB00160 Text: HSB00162 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Section 1. NEW SECTION. 634A.1 DEFINITIONS.
1 2 As used in this chapter, unless the context otherwise
1 3 requires:
1 4 1. "Person with a disability" means a person to whom one
1 5 of the following applies, prior to creation of a trust which
1 6 otherwise qualifies as a supplemental needs trust for the
1 7 person's benefit:
1 8 a. Is considered to be a person with a disability under
1 9 the disability criteria specified in Title II or Title XVI of
1 10 the federal Social Security Act.
1 11 b. Has a physical or mental illness or condition which, in
1 12 the expected natural course of the illness or condition, to a
1 13 reasonable degree of medical certainty, is expected to
1 14 continue for a continuous period of twelve months or more and
1 15 substantially impairs the person's ability to provide for the
1 16 person's care or custody.
1 17 2. "Supplemental needs trust" means an inter vivos or
1 18 testamentary trust created for the benefit of a person with a
1 19 disability and funded by a person other than the trust
1 20 beneficiary or the beneficiary's spouse. "Supplemental needs
1 21 trust" shall include a trust created for the benefit of a
1 22 person with a disability and funded solely with moneys awarded
1 23 as damages in a personal injury case or moneys received in the
1 24 settlement of a personal injury case provided that the trust
1 25 is created within six months of receiving the award or
1 26 settlement, the trust is irrevocable, and the beneficiary is
1 27 not named the trustee of the trust.
1 28 Sec. 2. NEW SECTION. 634A.2 SUPPLEMENTAL NEEDS TRUST –
1 29 REQUIREMENTS.
1 30 1. A supplemental needs trust established in compliance
1 31 with this chapter is in keeping with the public policy of this
1 32 state and is enforceable.
1 33 2. A supplemental needs trust established under this
1 34 chapter shall comply with all of the following:
1 35 a. Shall be established as a discretionary trust for the
2 1 purpose of providing a supplemental source for payment of
2 2 expenses which include but are not limited to the reasonable
2 3 living expenses and basic needs of a person with a disability
2 4 only if benefits from publicly funded benefit programs are not
2 5 sufficient to provide adequately for those expenses and needs.
2 6 b. Shall contain provisions which prohibit disbursements
2 7 that would result in replacement, reduction, or substitution
2 8 for publicly funded benefits otherwise available to the
2 9 beneficiary or in rendering the beneficiary ineligible for
2 10 publicly funded benefits. The supplemental needs trust shall
2 11 provide for distributions only in a manner and for purposes
2 12 that supplement or complement the benefits available under
2 13 medical assistance, state supplementary assistance, and other
2 14 publicly funded benefit programs for persons with
2 15 disabilities.
2 16 3. For the purpose of establishing eligibility of a person
2 17 as a beneficiary of a supplemental needs trust, disability may
2 18 be established conclusively by the written opinion of a
2 19 licensed professional who is qualified to diagnose the illness
2 20 or condition, if confirmed by the written opinion of a second
2 21 licensed professional who is also qualified to diagnose the
2 22 illness or condition.
2 23 4. A supplemental needs trust is not enforceable if the
2 24 trust beneficiary becomes a patient or resident after sixty-
2 25 four years of age in a state institution or nursing facility
2 26 for six months or more and, due to the beneficiary's medical
2 27 need for care in an institutional setting, there is no
2 28 reasonable expectation, as certified by the beneficiary's
2 29 attending physician, that the beneficiary will be discharged
2 30 from the facility. For the purposes of this subsection, a
2 31 beneficiary participating in a group residential program is
2 32 not a patient or resident of a state institution or nursing
2 33 facility.
2 34 5. The trust income and assets of a supplemental needs
2 35 trust are considered available to the beneficiary for medical
3 1 assistance or other public assistance program purposes to the
3 2 extent that income and assets are considered available in
3 3 accordance with the methodology applicable to a particular
3 4 program.
3 5 6. A supplemental needs trust is not subject to
3 6 administration in the Iowa district court sitting in probate.
3 7 A trustee of a supplemental needs trust has all powers and
3 8 shall be subject to all the duties and liabilities of a
3 9 trustee as provided in the probate code, except the duty of
3 10 reporting to or obtaining approval of the court.
3 11 7. Notwithstanding the prohibition of the funding of a
3 12 supplemental needs trust by the beneficiary or the
3 13 beneficiary's spouse, a supplemental needs trust may be
3 14 established with the proceeds of back payments made by the
3 15 United States social security administration resulting from a
3 16 judgment regarding the regulatory schemes for determination of
3 17 the disability of a child.
3 18 EXPLANATION
3 19 This bill reenacts Code chapter 634A which was repealed in
3 20 1995. Code chapter 634A relates to supplemental needs trusts
3 21 for people with disabilities.
3 22 The bill defines "supplemental needs trust" as an inter
3 23 vivos or testamentary trust created for the benefit of a
3 24 person with a disability and funded by a person other than the
3 25 trust beneficiary or the beneficiary's spouse. A supplemental
3 26 needs trust is also defined as a trust created for the benefit
3 27 of a person with a disability and funded solely with moneys
3 28 awarded as damages in a personal injury case or moneys
3 29 received in the settlement of a personal injury case provided
3 30 that the trust is created within six months of receiving the
3 31 award or settlement, the trust is irrevocable, and the
3 32 beneficiary is not named the trustee of the trust.
3 33 The bill provides that a supplemental needs trust must be
3 34 established as a discretionary trust for the purpose of
3 35 providing a supplemental source for the payment of expenses
4 1 only if benefits from publicly funded benefit programs are not
4 2 sufficient to provide adequately for those expenses and needs.
4 3 The bill also provides that a supplemental needs trust must
4 4 contain provisions which would prohibit disbursements that
4 5 would result in replacement, reduction, or substitution of
4 6 publicly funded benefits or would render the beneficiary
4 7 ineligible for publicly funded benefits. Distributions under
4 8 the trust must only be in a manner or for purposes that
4 9 supplement or complement publicly funded benefits.
4 10 The bill provides that eligibility of a person as a
4 11 beneficiary may be established conclusively by the written
4 12 opinion of a qualified licensed professional if confirmed by
4 13 the written opinion of a second qualified licensed
4 14 professional.
4 15 The bill provides that a supplemental needs trust becomes
4 16 unenforceable if the beneficiary becomes a patient or resident
4 17 after 64 years of age in a state institution or nursing
4 18 facility for six months or more and there is no reasonable
4 19 expectation the beneficiary will be discharged. The trust
4 20 will not become unenforceable for living in a group
4 21 residential program.
4 22 The bill provides that the trust income and assets of a
4 23 supplemental needs trust are considered available to the
4 24 beneficiary for medical assistance or other public assistance
4 25 program purposes to the extent that income and assets are
4 26 considered available in accordance with the methodology
4 27 applicable to a particular program.
4 28 The bill provides that a supplemental needs trust is not
4 29 subject to administration in the Iowa district court sitting
4 30 in probate.
4 31 The bill provides that the trust may be established with
4 32 the proceeds of back payments made by the United States social
4 33 security administration resulting from a judgment regarding
4 34 the regulatory schemes for determination of child disability.
4 35 LSB 2007YC 77
5 1 tm/jj/8.1
Text: HSB00160 Text: HSB00162 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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