Substitute Senate Bill No. 520
Substitute Senate Bill No. 520
PUBLIC ACT NO. 98-232
AN ACT CONCERNING INTER VIVOS TRUSTS.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. Section 45a-151 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) Upon application by executors, guardians,
conservators, administrators [, trustees in
insolvency] and trustees appointed, or whose
appointment has been approved, by the Court of
Probate, the court may, after [public notice] SUCH
NOTICE AS THE COURT SHALL DIRECT and hearing,
authorize such fiduciaries to compromise and
settle any doubtful or disputed claims or actions,
or any appeal from probate in favor of or against
the estates or persons represented by them.
(b) In order to accomplish such compromise or
settlement, the COURT MAY, AFTER DEDUCTION OF
ATTORNEY'S FEES AND COSTS, AUTHORIZE SUCH
SETTLEMENT AS PROPOSED BY THE FIDUCIARY IN A LUMP
SUM OR IN PERIODIC PAYMENTS TO THE ESTATE, TO AN
EXISTING TRUST OR TO A NEWLY CREATED TRUST FOR THE
BENEFIT OF THOSE REPRESENTED BY THE FIDUCIARY.
SUCH TRUSTS MAY INCLUDE THOSE CREATED IN
COMPLIANCE WITH SECTION 1917(d)(4) OF THE SOCIAL
SECURITY ACT, 42 USC 1396p(d)(4), AS FROM TIME TO
TIME AMENDED. IN THE CASE OF A GIFT OR TRANSFER IN
TRUST, ANY TRANSFER TO A COURT-APPROVED TRUST
CREATED BY A FIDUCIARY SHALL BE SUBJECT TO
CONTINUING PROBATE COURT JURISDICTION AS IF IT
WERE A TESTAMENTARY TRUST. IN DECIDING WHETHER THE
NET SETTLEMENT AS PROPOSED BY THE FIDUCIARY IS
BENEFICIAL, THE COURT SHALL CONSIDER THE BEST
INTERESTS OF THOSE REPRESENTED BY THE FIDUCIARY,
AND IN THE CASE OF A DECEDENT'S ESTATE, THE
INTENTION OF THE DECEDENT. THE court may ALSO
authorize the conveyance, with or without
requiring a bond, of the whole or any part of, or
any easement or other interest in, any real
property situated in this state forming part of
the trust estate or owned by any such trustee,
executor or administrator or owned by any deceased
person, ward or incapable person for whom such an
executor, guardian, conservator or administrator
was appointed.
Sec. 2. Subsection (e) of section 45a-655 of
the general statutes is repealed and the following
is substituted in lieu thereof:
(e) Upon application of a conservator of the
estate, after hearing with notice to the
Commissioner of Administrative Services, THE
COMMISSIONER OF SOCIAL SERVICES and to all parties
who may have an interest as determined by the
court, the court may authorize the conservator [to
pay and distribute gifts of income and principal
from the estate of the ward in such amounts or in
such form as the court approves, to individuals
and qualified charities as defined in] TO MAKE
GIFTS OR OTHER TRANSFERS OF INCOME AND PRINCIPAL
FROM THE ESTATE OF THE WARD IN SUCH AMOUNTS AND IN
SUCH FORM, OUTRIGHT OR IN TRUST, WHETHER TO AN
EXISTING TRUST OR A COURT-APPROVED TRUST CREATED
BY THE CONSERVATOR, AS THE COURT ORDERS TO OR FOR
THE BENEFIT OF INDIVIDUALS, INCLUDING THE WARD,
AND TO OR FOR THE BENEFIT OF CHARITIES, TRUSTS OR
OTHER INSTITUTIONS DESCRIBED IN SECTIONS 2055(a)
AND 2522(a) OF the Internal Revenue Code of 1986,
or any corresponding internal revenue code of the
United States, as from time to time amended. Such
gifts OR TRANSFERS shall be authorized only if the
court finds that: (1) In the case of individuals
not related to the ward by blood or marriage, the
ward [has] HAD made a previous gift to that
individual prior to being declared incapable; (2)
in the case of a charity, EITHER (A) the ward had
made a previous gift to such charity, [or] HAD
pledged a gift in writing to such charity, OR HAD
OTHERWISE DEMONSTRATED SUPPORT FOR SUCH CHARITY
prior to being declared incapable; OR (B) THE
COURT DETERMINES THAT THE GIFT TO THE CHARITY IS
IN THE BEST INTERESTS OF THE WARD, IS CONSISTENT
WITH PROPER ESTATE PLANNING, AND THERE IS NO
REASONABLE OBJECTION BY A PARTY HAVING AN INTEREST
IN THE WARD'S ESTATE AS DETERMINED BY THE COURT;
(3) the estate of the ward AND ANY PROPOSED TRUST
OF WHICH THE WARD IS A BENEFICIARY is more than
sufficient to carry out the duties of the
conservator as set forth in subsections (a) and
(b) of this section, both for the present and
foreseeable future, including due provision for
the continuing proper care, comfort and
maintenance of such ward in accordance with such
ward's established standard of living and for the
support of persons the ward is legally obligated
to support; (4) the purpose of the gifts is not to
diminish the estate of the ward so as to qualify
the ward for federal or state aid or benefits; and
(5) in the case of a ward capable of making an
informed decision, the ward has no objection to
such gift. The court shall give consideration to
the following: (A) The medical condition of the
ward, including the prospect of restoration to
capacity; (B) the size of the ward's estate; (C)
the provisions which, in the judgment of the
court, such ward would have made if he or she had
been capable, for minimization of income and
estate taxes consistent with proper estate
planning; AND (D) IN THE CASE OF A TRUST, WHETHER
THE TRUST SHOULD BE REVOCABLE OR IRREVOCABLE,
EXISTING OR CREATED BY THE CONSERVATOR AND COURT
APPROVED. THE COURT SHOULD ALSO CONSIDER THE
PROVISIONS OF AN EXISTING ESTATE PLAN, IF ANY. IN
THE CASE OF A GIFT OR TRANSFER IN TRUST, ANY
TRANSFER TO A COURT-APPROVED TRUST CREATED BY THE
CONSERVATOR SHALL BE SUBJECT TO CONTINUING PROBATE
COURT JURISDICTION IN THE SAME MANNER AS A
TESTAMENTARY TRUST INCLUDING PERIODIC RENDERING OF
ACCOUNTS PURSUANT TO SECTION 45a-177.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS
SECTION, THE COURT MAY AUTHORIZE THE CREATION AND
FUNDING OF A TRUST THAT COMPLIES WITH SECTION
1917(d)(4) OF THE SOCIAL SECURITY ACT, 42 USC
1396p(d)(4), AS FROM TIME TO TIME AMENDED. The
provisions of this [section] SUBSECTION shall not
be construed to validate or invalidate any gifts
made by a conservator of the estate prior to
October 1, [1983] 1998.
Approved June 11, 1998