SUPPLEMENTAL NEEDS TRUST f/b/o [NAME]
We, [NAME] and [NAME], both of [Town], Connecticut, create this Trust for the benefit of our son/daughter, [NAME], with ourselves as Trustees (hereafter collectively referred to as “Trustee”), to be known as the "Supplemental Needs Trustf/b/o [Disabled Child’s Name]." The Trustee shall hold and administer any property which the Trustee may receive (the "Trust Property") as follows:
PARAGRAPH 1:PURPOSE OF TRUST
(a)This Trust shall be for the sole benefit of our daughter, [NAME], during her lifetime and shall be administered according to the terms and limitations set forth herein. [First name] is the preferred beneficiary and her interests shall be given priority over the interest of any Remainder Beneficiaries. In following the terms of this trust, the Trustee should understand our intention concerning [First Name]’s care. While we understand and intend that the Trustee has sole discretion concerning all distributions, we intend for the following information to provide the Trustee guidance in exercising the Trustee’s discretion in distributions for [First Name].
(b)[First Name]has a [describe disability]. Due to [First Name]’s disability, she has the right to receive certain governmental assistance. The purpose in making assets available from this Trust is to provide the funds necessary to ensure her care and happiness over and above essential, primary support and services if funding for those services is provided through public aid. The intent of this Trust is to give [First Name]the opportunity to develop her full potential and to enjoy as pleasant, comfortable and happy a life as is possible by qualifying her for public benefits and using the Trust assets to supplementthose benefits. The Trustee may use its sole, absolute, and uncontrolleddiscretion to pay for her supplemental support and maintenance keeping this purpose in mind.
PARAGRAPH 2: ADMINISTRATION OF TRUST FOR [FIRST NAME]
Any property, real or personal, may be transferred to the Trustee by anyone with the consent of the Trustee. Any property transferred to the Trustee by a party other than us is a gift to the Trust and cannot be reclaimed by that party. The Trustee shall hold, manage, invest and reinvest the Trust Property, and shall apply the income and principal of the Trust Property for the benefit of our daughter, [NAME], as follows:
(a)The Trustee shall expend for [First Name]’s benefit, during her life, so much of the annual net income and principal, even to the exhaustion thereof, as the Trustee deems advisable in its sole, absolute, and uncontrolled discretion and consistent with the terms of subparagraph (b). The Trustee shall add undistributed annual net income to principal. The Trustee shall not distribute any funds directly to[First Name], except pocket money. [First Name]shall have no right to direct a distribution from this Trust for any purpose. [First Name]shall have no right to revoke or terminate this Trust.
(b)In making distributions to [First Name], the Trustee shall take into consideration the applicable resource limitations of the public assistance programs for which she is eligible. Wedirect the Trustee toavoid paying for or repaying the cost of any general support or medical care which isavailable through public resources, including Supplemental Security Income ("SSI"), Medicaid ("Title XIX"), and any other appropriate federal, state or local benefit program. Nevertheless, the Trustee may make distributions that could preclude [First Name] from receiving certain government benefits if the Trustee determines, in its sole, absolute and uncontrolled discretion, that [First Name]’s future well-being would not be materially prejudiced by not receiving such benefits. We ask the Trustee to make reasonable efforts to avoid making distributions that supplant services, benefits or medical care otherwise available to [First Name] from governmental or private sources, or both, unless the Trustee has determined in his or her sole, absolute, and uncontrolled discretion that the benefit to [First Name] from the particular trust distribution outweighs the reduction in a particular public benefit program that may be a consequence of the trust distribution. For purposes of determining [First Name]'s eligibility for such programs, no part of the principal or undistributed income of this trust shall be considered available to her. In the event the Trustee is requested to release principal or income of the trust to or on behalf of [First Name] to pay for equipment, medication, or services which any such program is authorized to provide (were it not for the existence of this trust), or in the event the Trustee is requested to petition the court or any other administrative agency for the release of trust principal or income for this purpose, the Trustee is authorized to deny such request and to take whatever administrative or judicial steps may be necessary to establish or continue [First Name]'s eligibility, including obtaining instructions from a court of competent jurisdiction ruling the trust is not available to [First Name] for such eligibility purposes. In addition, the Trustee may amend this Agreement at any time to the extent necessary to establish or maintain [First Name]'s eligibility for any public benefits, notwithstanding the terms of Paragraph6(e). Any expenses incurred by the Trustee under this subparagraph (b), including attorneys' fees, shall be a proper charge to this trust. I specifically intend that this trust shall be supplemental to public benefits that the Trustee deems important to [First Name].
(c)At any time, the Trustee may transfer any portion or all of the trust property to a non-profit organization such as Planned Lifetime Assistance Network of Connecticut, Inc. (PLAN of CT) that will provide planning and trust management services for the benefit of [First Name]. The organization shall hold the funds in trust for the benefit of [First Name] and at her death any remaining balance shall pass to our child, [NAME], or if he is not then living, to his then living descendants, per stirpes.
(d)Upon [First Name]'s death, if the Trustee has not transferred all of the trust property to a non-profit organization as described in subparagraph (c), the Trustee shall set out the balance under PARAGRAPH 3 forour son, [NAME]. If [First Name] is not then living, the Trustee shall set out the balance under PARAGRAPH 4 for his then living descendants, per stirpes.
PARAGRAPH 3:TRUST FOR [NON-DISABLED CHILD]
The Trustee shall administer any portion set out under this Paragraph for our son, [NAME], as follows:
(a)[First Name] shall be the initial Trustee of this Trust if he has reached the age of twenty-five (25). If [First Name] has not yet reached age of twenty-five (25), or has attained such age but is unable or unwilling to serve, then _____, ______, shall serve as the Trustee until [First Name] reaches the age of twenty-five (25).
(b)If the trust is the beneficiary of any retirement accounts, then in each year the Trustee shall withdraw the required minimum distribution, plus such additional amounts, if any, the Trustee deems advisable in its sole, absolute and uncontrolled discretion. The Trustee shall distribute such
amounts to or for the benefit of [First Name]. In addition, the Trustee shall pay to or for the benefit of [First Name], during his life, so much of the annual net income and principal, even to the exhaustion thereof, as the Trustee deems necessary and advisable for his education, health, maintenance and support. The Trustee may also pay to or for the benefit of [First Name]’ descendants, not necessarily in equal shares, so much of the remaining annual net income and principal as the Trustee deems necessary and advisable for their education, health, maintenance and support. The Trustee shall add undistributed annual net income to principal.
(c)In addition, [First Name] shall have the power, exercisable by one or more written notices filed with the Trustee during his life, or by Will, to appoint all or any part of the principal, other than insurance policies on his life, to or for the benefit of any person or persons or charitable organizations, or any of them, except himself, his estate, his creditors or the creditors of his estate, in such proportions and amounts as he shall determine. The Trustee shall distribute any portion so appointed according to the terms of such appointment.
Upon [First Name]’ death, if he has not exercised the power in subparagraph (c) as to allofthe trust principal, the Trustee shall set out the balance under PARAGRAPH 4 for [First Name]’ then living descendants, per stirpes. If [First Name] does not have any descendants then living, the Trustee shall distribute the balance in accordance with PARAGRAPH 5.
PARAGRAPH 4:TRUSTS FOR DESCENDANTS OF [NON-DISABLED CHILD]
The Trustee shall divide any part or portion set out under this Paragraph on account of my son, [NAME],among his then living descendants, per stirpes, and shall administer each descendant's share as follows:
(a)The Trustee shall distribute the share of any descendant who has reached the age of twenty-five (25) to the descendant.
(b)The Trustee shall pay to or for the benefit of each descendant who has not reached the age of twenty-five (25), so much of the annual net income and principal from the descendant's share as the Trustee deems necessary and advisable for the education, health, maintenance and support of the descendant. The Trustee shall consider other resources available to the descendant. The Trustee shall add undistributed annual net income to principal. When the descendant reaches the age of twenty-five (25), the Trustee shall distribute the balance of the share to the descendant. If the descendant dies before age twenty-five (25), the Trustee shall distribute the balance of the share to the descendant's estate.
PARAGRAPH 5:CONTINGENT DISTRIBUTION
If any part of the Trust Property is undistributable upon the death of the last to die of our daughter, [First Name], our son,[First Name], and all of [First Name]’ descendants, the Trustee shall distribute that part as follows:
(a)One-half (1/2) to the heirs of[husband].determined under Connecticut law as if he had died intestate and unmarried at that time.
(b) One-half (1/2) to the heirs of [wife]determined under Connecticut law as if she had died intestate and unmarried at that time.
PARAGRAPH 6:MISCELLANEOUS TERMS
(a)If at any time any portion or share of the Trust Property under PARAGRAPHS 3 or 4 [for Nondisabled Child]shall be less than One Hundred Thousand Dollars ($100,000), the Trustee may in its absolute, sole and uncontrolleddiscretion distribute that portion or share to its then primary income beneficiary.
(b)The term "education" shall mean attendance at any educational institution, including private grammar schools, private preparatory schools, colleges, universities, trade schools or graduate schools; and shall include vocational apprenticeships, internships and residencies; and shall include tuition, living and transportation expenses, and the cost of books and equipment required by any educational institution.
(c)No interest of any beneficiary in any trust held under PARAGRAPHS 2, 3 or 4shall be subject to pledge, assignment, sale or transfer in any manner. No beneficiary shall have the power in any manner to anticipate, charge or encumber such interest. No such interest shall be liable or subject in any manner, while in the possession of the Trustee, for the beneficiary's debts, contracts, liabilities or torts.
(d)No exercise of a power of appointment created in this Agreement is effective unless it specifically refers to the power. No power of appointment shall be exercisable in favor of the powerholder, the powerholder's estate, or the creditors of either.
(e)Ourrights to amend and revoke this Agreement under PARAGRAPH 8 shall be exercisable only by uspersonally. We specifically intend that these rights shall not be exercisable on ourbehalf by the holder of a durable power ofattorney from either of us or by the personal representative of either of us who may become legally incompetent.
PARAGRAPH 7:POWERS OF TRUSTEE
In addition to any powers conferred on trustees by law and in this Agreement, the Trustee shall have the following powers:
(a)To receive additional property, real or personal, from any person at any time by gift, devise or bequest, by designation of the Trustee to receive insurance proceeds, or otherwise.
(b)To retain, without liability for any resulting loss or depreciation, all property, real or personal, received or purchased by the Trustee from usor ourestates, specifically including any stock of any banking corporation or association which may serve as Trustee, or any security of an affiliated company, although that property may not be of the type prescribed by law for the investment of trust funds, and without regard to what percentage of the value of the Trust Property it represents.
(c)To invest and reinvest the Trust Property in common or preferred stocks, common trust funds, mutual funds, bonds, debentures, notes, securities, life insurance or annuity contracts, or other real or personal property, wherever located, either of the type now or hereafter ordinarily approved for the investment of trust funds, or not, as the Trustee in its sole discretion may select; to make and change such investments from time to time according to its discretion; and to hold any investment in the name of a nominee.
(d)To sell, exchange, lease, rent, pledge, mortgage, transfer or otherwise dispose of any part of the Trust Property on such terms and conditions as it may, in its sole discretion, deem proper, including the power to make distributions in cash or in kind; and to delegate to an attorney-in-fact the power to execute all deeds and other documents appropriate to real estate transactions. These powers may be exercised for periods extending beyond the duration of any trust under this Agreement.
(e)To borrow money, guarantee loans and assume indebtedness for such periods of time and upon such terms and conditions as the Trustee deems advisable, including the power of a corporate Trustee to borrow from itself or a related lending entity, and to secure such loans.
(f)To pay all taxes and expenses attributable to the management of the Trust Property out of principal or income as the Trustee, in its sole discretion, determines; to file returns for all taxes; and to settle and compromise any claims arising in connection with taxes.
(g)To exercise in person or by proxy, all voting, option, subscription, reorganization, consolidation, merger and liquidation rights, and all other rights pertaining to securities in the Trust Property, specifically including any securities issued by any banking corporation or association which may serve as Trustee, or any security of an affiliated company; and to take any other actions necessary because of such exercise.
(h)To hold the principal of two or more trusts in one or more consolidated funds in which the trusts shall have undivided interests.
(i)To pay without liability any sum due a beneficiary under the age of twenty-one (21) as follows: (1) to the beneficiary, (2) to a parent of the beneficiary on his or her behalf, or (3) to such person and in such manner as the Trustee deems for the beneficiary's benefit, including a custodian under the uniform gifts or transfers to minors act of any state.
(j)To purchase and/or maintain residential properties for rent-free occupancy by any of the beneficiaries, including the payment of real estate taxes and insurance premiums, and to charge these expenses against that beneficiary's trust.
(k)To purchase and/or maintain life insurance or annuity contracts on the lives of any of the beneficiaries, or any person in whom a beneficiary has an insurable interest, and to charge these payments against that beneficiary's trust.
(l)To elect any settlement option permitted by any insurance policy payable to the Trustee which the Trustee, in its sole discretion, deems to be for the best interests of any of the beneficiaries; and to compromise any claim arising out of the policy.
(m)To elect any form of payment from any qualified or nonqualified plan or individual retirement account (IRA) payable to the Trustee, and to make any related tax elections.
(n)To transfer the principal of any trustto the Trustee under any trust agreement created by one or both of us (but only after our deaths) on substantially the same terms, to be added to the principal of the trusts created thereunder. The Trustee shall have no liability for actions taken or omitted in reliance on this subparagraph.
(o)To accept assets from the Trustee of any trust created by one or both of usand to add the same to the trust created on substantially the same terms under this Agreement. The Trustee shall have no liability for actions taken or omitted in reliance on this subparagraph.
(p)To divide any trust into separate trusts for any purpose, such as allocating the federal generation skipping transfer tax exemption so that one or more of these trusts is entirely exempt from the federal generation skipping transfer tax. In investing and making distributions from the separate trusts, the Trustee shall consider the tax saving opportunities afforded by the existence of separate trusts.