SF 242

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to human services; providing for treatment of 
  1.3             certain trusts under the medical assistance program; 
  1.4             clarifying enforceability of certain supplemental 
  1.5             needs trusts; amending Minnesota Statutes 1994, 
  1.6             sections 265B.056, by adding a subdivision; and 
  1.7             501B.89, subdivision 1, and by adding a subdivision. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1994, section 256B.056, is 
  1.10  amended by adding a subdivision to read: 
  1.11     Subd. 3b.  [TREATMENT OF TRUSTS.] (a) A "medical assistance 
  1.12  qualifying trust" is a revocable or irrevocable trust, or 
  1.13  similar legal device, established on or before August 10, 1993, 
  1.14  by a person or the person's spouse under the terms of which the 
  1.15  person receives or could receive payments from the trust 
  1.16  principal or income and the trustee has discretion in making 
  1.17  payments to the person from the trust principal or income.  
  1.18  Notwithstanding that definition, a medical assistance qualifying 
  1.19  trust does not include:  (1) a trust set up by will; (2) a trust 
  1.20  set up before April 7, 1986, solely to benefit a person with 
  1.21  mental retardation living in an intermediate care facility for 
  1.22  persons with mental retardation; or (3) a trust set up by a 
  1.23  person with payments made by the Social Security Administration 
  1.24  pursuant to the United States Supreme Court decision in Sullivan 
  1.25  v. Zebley, 110 S. Ct. 885 (1990).  The maximum amount of 
  1.26  payments that a trustee of a medical assistance qualifying trust 
  2.1   may make to a person under the terms of the trust is considered 
  2.2   to be available assets to the person, without regard to whether 
  2.3   the trustee actually makes the maximum payments to the person 
  2.4   and without regard to the purpose for which the medical 
  2.5   assistance qualifying trust was established. 
  2.6      (b)  Trusts established after August 10, 1993, are treated 
  2.7   according to section 13611(b) of the Omnibus Budget 
  2.8   Reconciliation Act of 1993, Public Law Number 103-66, commonly 
  2.9   known as OBRA 1993. 
  2.10     Sec. 2.  Minnesota Statutes 1994, section 501B.89, 
  2.11  subdivision 1, is amended to read: 
  2.12     Subdivision 1.  [TRUSTS CONTAINING LIMITATIONS LINKED TO 
  2.13  ELIGIBILITY FOR PUBLIC ASSISTANCE.] (a) Except as allowed by 
  2.14  subdivision 2 or 3, a provision in a trust that provides for the 
  2.15  suspension, termination, limitation, or diversion of the 
  2.16  principal, income, or beneficial interest of a beneficiary if 
  2.17  the beneficiary applies for, is determined eligible for, or 
  2.18  receives public assistance or benefits under a public health 
  2.19  care program is unenforceable as against the public policy of 
  2.20  this state, without regard to the irrevocability of the trust or 
  2.21  the purpose for which the trust was created. 
  2.22     (b) This subdivision applies to trust provisions created 
  2.23  after July 1, 1992.  For purposes of this section, a trust 
  2.24  provision is created on the date of execution of the first 
  2.25  instrument that contains the provision, even though the trust 
  2.26  provision is later amended or reformed or the trust is not 
  2.27  funded until a later date.  
  2.28     Sec. 3.  Minnesota Statutes 1994, section 501B.89, is 
  2.29  amended by adding a subdivision to read: 
  2.30     Subd. 3.  [SUPPLEMENTAL NEEDS TRUSTS UNDER FEDERAL LAW.] A 
  2.31  trust created on or after August 11, 1993, which qualifies as a 
  2.32  supplemental needs trust for a person with a disability under 
  2.33  United States Code, title 42, section 1396p(c)(2)(B)(iv) or 
  2.34  1396p(d), as amended by section 13611(b) of the Omnibus Budget 
  2.35  Reconciliation Act of 1993, Public Law Number 103-66, commonly 
  2.36  known as OBRA 1993, is enforceable, and the courts of this state 
  3.1   may authorize creation and funding of a trust which so qualifies.
  3.2      Sec. 4. [EFFECTIVE DATE.] 
  3.3      Sections 1 to 3 are effective retroactive to August 11, 
  3.4   1993.