{"data":{"id":"us-ky/krs-386b.13-120","jurisdiction":"us-ky","citation":"KRS 386B.13-120","heading":"Definitions for section -- Trust for beneficiary with disability.","body":"(1) As used in this section:\n(a) \"Beneficiary with a disability\" means a beneficiary of a first trust who the\nspecial needs fiduciary believes may qualify for governmental benefits based\non disability, whether or not the beneficiary currently receives those benefits\nor is an in individual who has been adjudicated incompetent;\n(b) \"Governmental benefits\" means financial aid or services from a state, federal,\nor other public agency;\n(c) \"Special needs fiduciary\" means, with respect to a trust that has a beneficiary\nwith a disability:\n1. A trustee or other fiduciary, other than a settlor, that has discretion to\ndistribute part or all of the principal of a first trust to one (1) or more\ncurrent beneficiaries;\n2. If no trustee or fiduciary has discretion under subparagraph 1. of this\nparagraph, a trustee or other fiduciary, other than a settlor, that has\ndiscretion to distribute part or all of the income of the first trust to one\n(1) or more current beneficiaries; or\n3. If no trustee or beneficiary has discretion under subparagraphs 1. and 2.\nof this paragraph, a trustee or other fiduciary, other than a settlor, that is\nrequired to distribute part or all of the income or principal o f the first\ntrust to one (1) or more current beneficiaries; and\n(d) \"Special needs trust\" means a trust that the trustee believes would not be\nconsidered a resource for purposes of determining whether a beneficiary with\na disability is eligible for governmental benefits.\n(2) A special needs fiduciary may exercise the decanting power in  KRS 386B.13-100\nover the principal of the first trust as if the fiduciary had authority to distribute\nprincipal to a beneficiary with a disability subject to expanded distributive\ndiscretion if:\n(a) A second trust is a special needs trust that benefits th e beneficiary with a\ndisability; and\n(b) The special needs fiduciary determines that exercise of the decanting power\nwill further the purposes of the first trust.\n(3) In an exercise of the decanting power under this section, the following rules apply:\n(a) Notwithstanding KRS 386B.13-100(3)(b), the interest in the second trust of a\nbeneficiary with a disability may:\n1. Be a pooled trust as defined by Medicaid law for the benefit of the\nbeneficiary with a disability under 42 U.S.C. sec. 1396p(d)(4)(A), as\namended; or\n2. Contain payback provisions complying with reimbursement\nrequirements of Medicaid law under 42 U.S.C. sec. 1396p(d)(4)(A), as\namended;\n(b) KRS 386B.13-100(3)(c) shall not apply to the interests of the beneficiary with\na disability; and\n(c) Except as affected by any change to the interests of the beneficiary with a\ndisability, the second trust, or if there are two (2) or more second trusts, the\nsecond trusts in the aggregate, shall grant each other beneficiary of the first\ntrust beneficial interes ts in the second trust which are substantially similar to\nthe beneficiary's beneficial interests in the first trust.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=57761","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:20Z","sha256":"3950762186bade0e1f368e86ab9c02e695ecd7dd52b242f6e3ce290e8c9a9e06","source_id":"us-ky","stale":false,"prev":"us-ky/krs-386b.13-110","next":"us-ky/krs-386b.13-130"},"notice":"GroundRules: Original legal text. Not legal advice."}