Virginia Code 64.2-779.10: Trust for beneficiary with disability
A. As used in this section:
Terms Used In Virginia Code 64.2-779.10
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: means a person that (i) has a present or future, vested or contingent, beneficial interest in a trust; (ii) holds a power of appointment over trust property; or (iii) is an identified charitable organization that will or may receive distributions under the terms of the trust. See Virginia Code 64.2-701
- Decanting power: means the power of an authorized fiduciary under the Uniform Trust Decanting Act (§ 64. See Virginia Code 64.2-701
- Expanded distributive discretion: means a discretionary power of distribution that is not limited to an ascertainable standard or a reasonably definite standard. See Virginia Code 64.2-701
- Fiduciary: includes a guardian, committee, trustee, executor, conservator, or personal representative. See Virginia Code 64.2-100
- Fiduciary: A trustee, executor, or administrator.
- First trust: means a trust over which an authorized fiduciary may exercise the decanting power. See Virginia Code 64.2-701
- Person: means an individual; estate; business or nonprofit entity; government; governmental subdivision, agency, or instrumentality; public corporation; or other legal entity. See Virginia Code 64.2-701
- Second trust: means (i) a first trust after modification, including a restatement of the first trust, under the Uniform Trust Decanting Act (§ 64. See Virginia Code 64.2-701
- Settlor: except as otherwise provided in § 64. See Virginia Code 64.2-701
- State: means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. See Virginia Code 64.2-701
- Trustee: A person or institution holding and administering property in trust.
- Trustee: includes an original, additional, and successor trustee and a cotrustee. See Virginia Code 64.2-701
“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 those benefits or is an individual who has been determined to be an incapacitated person.
“Governmental benefits” means financial aid or services from a state, federal, or other public agency.
“Special-needs fiduciary” means, with respect to a trust that has a beneficiary with a disability:
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 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 or more current beneficiaries.
“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 § 64.2-779.8 over the income or principal of a first trust, including a first trust under which the fiduciary has only limited distributive discretion as defined in subsection A of § 64.2-779.9, as if the fiduciary had authority to distribute income or 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 C 2 of § 64.2-779.8, 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); or
b. Contain payback provisions complying with reimbursement requirements of Medicaid law under 42 U.S.C. § 1396p(d)(4)(A).
2. Subdivision C 3 of § 64.2-779.8 does 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, must grant each other beneficiary of the first trust beneficial interests in the second trusts that are substantially similar to the beneficiary’s beneficial interests in the first trust.
2017, c. 592.