Qualification of Trust; Documents; Life Beneficiaries; Trustees and Cotrustees; Income; Transfers; Distributions and Expenditures

  1. Law
  2. Georgia Code
  3. Handicapped Persons
  4. Community Trusts
  5. Qualification of Trust; Documents; Life Beneficiaries; Trustees and Cotrustees; Income; Transfers; Distributions and Expenditures

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  1. The board of trustees shall take all steps necessary to satisfy all federal and state laws to ensure that the community trust is qualified to supplement the provision of government funding for persons with one or more impairments and, where necessary, is qualified as a tax-exempt entity under the United States Internal Revenue Code.
  2. The documents establishing a community trust shall include and be limited by the following:
    1. To be eligible to participate in a community trust, a life beneficiary must suffer from one or more impairments as defined in this chapter;
    2. A community trust may accept contributions from any source, so long as basic eligibility requirements are satisfied, to be held, administered, managed, invested, and distributed in order to facilitate the coordination and integration of private financing for individuals who have one or more impairments, while maintaining the eligibility of those individuals for government funding. All contributions and the earnings of a community trust shall be administered as one trust for purposes of investment and management of funds. Notwithstanding the administration as one trust for investment and management, one or more separate accounts shall be established for each designated life beneficiary. The net income earned after deducting administrative expenses shall be credited to the accounts of the life beneficiaries, in proportion to the amount of the contribution made for each life beneficiary to the total contributions made for all life beneficiaries;
    3. Every donor shall designate a specific person as the life beneficiary of the contribution made by the donor. In addition, each donor shall name a cotrustee and a successor or successors to the cotrustee to act with the trustees of the community trust on behalf of the designated life beneficiary. A life beneficiary or the spouse of a life beneficiary shall not be eligible to be a cotrustee or a successor cotrustee;
    4. If a donor designates himself or herself or his or her spouse as the life beneficiary, then the account of the life beneficiary shall, regardless of any other provision of this chapter, meet the following additional conditions:
      1. The contribution or contributions of the life beneficiary or his or her spouse to the community trust shall be irrevocable;
      2. The funds remaining in the life beneficiary's account upon the death of the life beneficiary shall, to the extent such funds result from contributions made by the life beneficiary or his or her spouse, be subject to the state reimbursement requirements of federal laws governing community trusts, including paragraph (4) of subsection (d) of 42 U.S.C. Section 1396p as applied by this state. Any funds remaining after satisfaction of such requirements shall be distributed as the donor has designated in writing, and if there is no such designation or should distribution to those designated by the donor be impossible, then to a successor trust; and
      3. Neither the donor nor the donor's spouse shall serve as cotrustee;
    5. During his or her lifetime, any donor who has not designated himself or herself or his or her spouse as the life beneficiary may revoke any contribution made to a community trust. Notwithstanding the first sentence of this paragraph, any donor may, at any time, voluntarily waive the right to revoke. Upon revocation, an amount equal to the current fair market value of the balance of the life beneficiary's account in the community trust as determined on the date of revocation shall be returned to the donor;
    6. The cotrustee and the trustees annually, or more frequently, shall agree on the amount of income or principal, or both, to be used to provide noncash benefits and the nature and type of benefits to be provided to the life beneficiary. Such permissible benefits shall include, but not be limited to: more sophisticated dental, medical, and diagnostic work or treatment than is otherwise available from public assistance; private rehabilitative training; supplementary educational aid; entertainment; periodic vacations and outings; expenditures to foster the interests, talents, and hobbies of the life beneficiary; and expenditures to purchase personal property and services which will make life more comfortable and enjoyable for the life beneficiary but which will not defeat the life beneficiary's eligibility for public assistance. Expenditures may include payment of the funeral and burial costs of the life beneficiary. The trustees and cotrustee may exercise discretion to make payments from time to time for a person to accompany the life beneficiary on vacations and outings and for the transportation of the life beneficiary or of friends and relatives of the life beneficiary to visit the life beneficiary. Expenditures shall not be made for the primary support or maintenance of the life beneficiary, including basic food, shelter, and clothing if, as a result, the life beneficiary would no longer be eligible to receive public benefits or assistance for which the life beneficiary would otherwise be eligible. Any net income which is not used shall be added annually to the principal;
    7. Any cotrustee may, for good and sufficient reason upon written notice to the trustees and a determination by the board of trustees that the reason for the transfer is good and sufficient or upon the issuance of a notice of termination by the board of trustees, transfer all of the current fair market value of the balance of the life beneficiary's account in the trust as determined on the date of transfer to another trustee to be held for the sole benefit of the life beneficiary during his or her life; provided, however, that if such a transfer involves funds contributed by the life beneficiary or his or her spouse, any trustee to whom funds are so transferred shall acknowledge in writing the right of the state to reimbursement as provided in 42 U.S.C. Section 1396p(d)(4). In no event shall a cotrustee be entitled to transfer only a portion of the current fair market value of the life beneficiary's account in the trust;
    8. If a life beneficiary for whose benefit a contribution has been made to the trust ceases to be eligible to participate in the trust, and neither the donor nor the cotrustee revokes or withdraws the contribution, then the board of trustees may, by written notice to the donor or cotrustee, terminate the trust as to such life beneficiary. Upon termination, the board of trustees shall distribute the fair market value of such life beneficiary's account in the trust to the person or persons the donor has designated; provided, however, that if the donor has failed to designate a person or persons for distribution in this event or if a distribution to the designated person or persons is impossible, the board of trustees shall distribute the fair market value of such life beneficiary's account in the trust to the trustee of the successor trust to be held, administered, and distributed by the successor trustee in accordance with the successor trust described in paragraph (10) of this subsection;
    9. Upon the death of the life beneficiary, then an amount equal to the current fair market value of the balance of the life beneficiary's account in the trust, as determined on the date of death, less payment of funeral and burial costs of the life beneficiary and satisfaction of any lien as provided in paragraph (4) of this subsection, shall be distributed to the person or persons the donor has designated; provided, however, that if the donor has failed to designate a person or persons for distribution in this event or if a distribution to the designated person or persons is impossible, the board of trustees shall distribute the fair market value of such life beneficiary's account to a successor trust. To the extent this provision must be modified for the life beneficiary to remain eligible for government benefits, such modifications shall be made; and
    10. The trustee of the successor trust shall hold, administer, and distribute the principal and income of the successor trust, in the discretion of the trustee, for the maintenance, support, health, education, and general well-being of indigent persons suffering from one or more impairments, recognizing that it is the purpose of the successor trust to supplement, not replace, any government benefits for the beneficiary's or beneficiaries' basic support for which the beneficiary or beneficiaries may be eligible and to improve the quality of the beneficiary's or beneficiaries' life by providing him, her, or them with those amenities which cannot otherwise be provided by public assistance or other available sources. Permissible expenditures include, but are not limited to: more sophisticated dental, medical, and diagnostic work or treatment than is otherwise available from public assistance; private rehabilitative training; supplementary educational aid; entertainment; periodic vacations and outings; expenditures to foster the interests, talents, and hobbies of the beneficiary or beneficiaries; and expenditures to purchase personal property and services which will make life more comfortable and enjoyable for the beneficiary or beneficiaries but which will not defeat his, her, or their eligibility for public assistance. Expenditures may include payment of the funeral and burial costs of the beneficiary or beneficiaries. The trustee of the successor trust, in his or her discretion, may make payments from time to time for a person to accompany a beneficiary on vacations and outings and for the transportation of a beneficiary or of friends or relatives of a beneficiary to visit a beneficiary. Any undistributed income of the successor trust shall be added to the principal from time to time. Expenditures shall not be made for the primary support or maintenance of a beneficiary, including basic food, shelter, and clothing, if, as a result, a beneficiary would no longer be eligible to receive public benefits or assistance for which such beneficiary would otherwise be eligible.
  3. The nonprofit organization administering the community trust may receive a distribution of trust assets as payment for services rendered to the life beneficiary or if the assets distributed are used solely for the benefit of the life beneficiary. The nonprofit organization administering a successor trust may receive a distribution of trust assets as payment for services rendered to a beneficiary or if the assets are used solely for the benefit of a beneficiary.

(Code 1981, §30-10-6, enacted by Ga. L. 1996, p. 804, § 2; Ga. L. 1997, p. 576, § 2; Ga. L. 2000, p. 1274, §§ 1, 2, 3, 4.)

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 1996, throughout this Code section, "Community Trust" was lower-cased and in the second sentence in paragraph (7), "cotrustee" was substituted for "co-trustee".

Law reviews.

- For article commenting on the 1997 amendment of this Code section, see 14 Ga. St. U.L. Rev. 167 (1997).


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