59-08 Trusts for Individuals With Disabilities
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special needs trust or a self-settled special needs trust for that individual's benefit, is
considered to be an individual with a disability as defined in 42 U.S.C. 1382c(a)(3).2."Self-settled special needs trust" means a trust created by an individual with a
disability after August 10, 1993, which qualifies under 42 U.S.C. 1396p(d)(4).3."Third-party special needs trust" means a trust that does not make an individual with
a disability ineligible for publicly funded benefits while maintaining assets in that trust
and which is created for the benefit of an individual with a disability and funded by
someone other than the trust beneficiary, the beneficiary's spouse, a parent of a
minor beneficiary, or anyone obligated to pay any sum for damages or any other
purpose to or for the benefit of the trust beneficiary under the terms of a settlement
agreement or judgment.59-08-02. Third-party special needs trusts under state law.1.A third-party special needs trust must provide for the living expenses and other
needs of an individual with a disability when publicly funded benefits are not
sufficient to provide adequately for those needs. A third-party special needs trust
must limit distributions in a manner and for purposes that supplement or
complement publicly funded benefits for an individual with a disability. A third-party
special needs trust may not have the effect of replacing, reducing, or substituting for
publicly funded benefits otherwise available to a beneficiary with a disability or
rendering a beneficiary with a disability ineligible for publicly funded benefits.2.This section applies to any third-party special needs trust that complies with the
requirements of this chapter, regardless of the date on which the trust was created
or funded. Notwithstanding any other provision of the law, this chapter does not
disqualify any beneficiary of a third-party special needs trust from receiving publicly
funded benefits if the trust did not disqualify that individual under previous law.59-08-03.Self-settled special needs trusts.The district court may authorize thecreation and funding of self-settled special needs trusts.59-08-04.Interpretation or enforcement - Reformation - Unenforceable trustprovisions.1.This chapter does not require the submission of a third-party special needs trust or a
self-settled special needs trust to a court for interpretation or enforcement.2.A third-party special needs trust may not disqualify a recipient of publicly funded
benefits solely because a contingent beneficiary is named to receive the net balance
of the trust estate upon the death of a beneficiary with a disability, or upon other
termination of the trust.3.The trustee or the grantor of any trust intended to be a third-party special needs trust
or a self-settled special needs trust may seek court reformation of the trust to
accomplish the purpose of a third-party special needs trust or a self-settled special
needs trust.4.Except for self-settled special needs trusts and third-party special needs trusts, a
provision in a trust which provides for the suspension, termination, limitation, or
diversion of the principal, income, or beneficial interest of a beneficiary if thePage No. 1beneficiary applies for, is determined eligible for, or receives publicly funded benefits
is unenforceable as against the public policy of this state, without regard to the
irrevocability of the trust or the purpose for which the trust was created.59-08-05. Conflicts with other chapters. If any provision of this chapter conflicts withchapter 59-09, 59-10, 59-11, 59-12, 59-13, 59-14, 59-15, 59-16, 59-17, 59-18, or 59-19, the
provision of this chapter takes precedence.Page No. 2Document Outlinechapter 59-08 trusts for individuals with disabilities