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statutes  is  repealed   and   the   following  is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the general statutes is repealed and the following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