Chief Sponsor: Lyle W. Hillyard

House Sponsor: Edward H. Redd


8     General Description:
9          This bill amends provisions related to the creation of a trust for an individual with a
10     disability.
11     Highlighted Provisions:
12          This bill:
13          ▸     expands who may establish a discretionary trust for an individual with a disability;
14     and
15          ▸     makes technical changes.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          None
20     Utah Code Sections Affected:
21     AMENDS:
22          62A-5-110, as last amended by Laws of Utah 2011, Chapter 366

24     Be it enacted by the Legislature of the state of Utah:
25          Section 1. Section 62A-5-110 is amended to read:
26          62A-5-110. Discretionary trust for an individual with a disability -- Impact on
27     state services.

28          (1) For purposes of this section:
29          (a) "Discretionary trust for [a person with disabilities] an individual with a disability"
30     means a trust:
31          (i) that is established for the benefit of an individual who, at the time the trust is
32     created, is under age 65 and has a disability, as defined in 42 U.S.C. Sec. 1382c;
33          (ii) under which the trustee has discretionary power to determine distributions;
34          (iii) under which the [beneficiary] individual may not control or demand payments
35     unless an abuse of the trustee's duties or discretion is shown;
36          [(iv) that contains the assets of the beneficiary and is established for the benefit of the
37     beneficiary by a parent, grandparent, legal guardian, or court;]
38          (iv) that contains the assets of the individual and is established for the benefit of the
39     individual by the individual, a court, or a parent, grandparent, or legal guardian of the
40     individual;
41          (v) that is irrevocable, except that the trust document may provide that the trust be
42     terminated if the [beneficiary] individual no longer has a disability, as defined in 42 U.S.C.
43     Sec. 1382c;
44          (vi) that is invalid as to any portion funded by property that is or may be subject to a
45     lien by the state; and
46          (vii) [providing] that provides that, upon the death of the [beneficiary] individual, the
47     state will receive all amounts remaining in the trust, up to an amount equal to the total medical
48     assistance paid on behalf of the [beneficiary] individual.
49          (b) "Medical assistance" means the same as that term is defined in Section 26-18-2.
50          (2) A state agency providing services or support to [a person with disabilities] an
51     individual with a disability may:
52          (a) waive application of Subsection (1)(a)(v) with respect to that individual if [it] the
53     state agency determines that application of the criteria would place an undue hardship upon that
54     individual; and
55          (b) define, by rule, what constitutes "undue hardship" for purposes of this section.
56          (3) A discretionary trust for [a person with disabilities] an individual with a disability
57     is not liable for reimbursement or payment to the state or any state agency, for financial aid or
58     services provided to that individual except:

59          (a) to the extent that the trust property has been distributed directly to or is otherwise
60     under the control of the beneficiary with a disability; or
61          (b) as provided in Subsection (1)(a)(vi).
62          (4) Property, goods, and services that are purchased or owned by a discretionary trust
63     for [a person with disabilities] an individual with a disability and that are used or consumed by
64     a beneficiary with a disability shall not be considered trust property that is distributed to or
65     under the control of the beneficiary.
66          (5) The benefits that [a person with disabilities] an individual with a disability is
67     otherwise legally entitled to may not be reduced, impaired, or diminished in any way because
68     of contribution to a discretionary trust for that [person] individual.
69          (6) All state agencies shall disregard a discretionary trust for [a person with disabilities,
70     as defined in Subsection (1),] an individual with a disability as a resource when determining
71     eligibility for services or support except as, and only to the extent that it is otherwise prohibited
72     by federal law.
73          (7) This section applies to all discretionary trusts that meet the requirements contained
74     in Subsection (1) created before, on, or after July 1, 1994.

Legislative Review Note
Office of Legislative Research and General Counsel