S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1680

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by M. of A. CLARK -- read once and referred to the Committee
  on Judiciary

AN ACT to amend the estates, powers  and  trusts  law,  in  relation  to
  establishing certain trusts as void as against public policy

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative intent. The legislature hereby finds that  many
citizens  are  engaging in the creation of trusts containing all or most
of their assets for the purpose of enabling them to qualify for medicaid
in the event of a protracted hospital stay  or  their  entrance  into  a
nursing  home.  While the creation of a trust to manage one's assets has
long been recognized as being a legitimate means of estate planning, the
legislature recognizes and by this  act  establishes,  as  a  matter  of
public policy, that the citizens of this state have an obligation to pay
for  their  own health care when able to do so and that the diversion of
normal payments from the beneficiary of a trust in order to  avoid  that
responsibility violates such public policy.
  S  2. Paragraph (b) of section 7-3.1 of the estates, powers and trusts
law is amended by adding a new subparagraph 5 to read as follows:
  (5) A DISPOSITION IN TRUST WHICH PROVIDES FOR THE  SUSPENSION,  TERMI-
NATION OR DIVERSION OF THE TRUST OR THE BENEFICIAL INTEREST OF ANY BENE-
FICIARY  OF SUCH TRUST IN THE EVENT THAT SUCH BENEFICIARY SHOULD REQUIRE
OR IS DIAGNOSED AS REQUIRING MEDICAL, HOSPITAL OR NURSING CARE  OR  LONG
TERM  CUSTODIAL,  NURSING  OR  MEDICAL CARE SHALL BE VOID AS AGAINST THE
PUBLIC POLICY OF THE STATE OF NEW YORK. THE COMMISSIONER  OF  HEALTH  IS
HEREBY  AUTHORIZED,  UPON  THE  APPLICATION  OF ANY SUCH BENEFICIARY FOR
MEDICAL BENEFITS, TO MAINTAIN AN ACTION TO COLLECT FROM SUCH  TRUST  THE
BENEFICIAL  INTEREST  OF  SUCH BENEFICIARY, INCLUDING THE INCOME AND ANY
PRINCIPAL AMOUNTS TO WHICH SUCH BENEFICIARY WOULD HAVE BEEN ENTITLED, BY
THE TERMS OF SUCH TRUST BY RIGHT OR IN THE DISCRETION  OF  THE  TRUSTEE,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD05791-01-3

A. 1680                             2

HAD  SUCH  BENEFICIARY  NOT  REQUIRED  OR  BEEN  DIAGNOSED  AS REQUIRING
MEDICAL, HOSPITAL OR NURSING CARE OR LONG  TERM  CUSTODIAL,  NURSING  OR
MEDICAL CARE.
  S  3.  This  act  shall take effect immediately and shall apply to all
trusts created or amended on or after such date.