Conn. Agencies Regs. § 3-22h-5 - Trust participation and participation agreements

(a) Designated Beneficiary Eligibility. A Designated Beneficiary may be any individual designated as such in an Application.

(b) Account Owner Eligibility. An Account Owner may be any Person (1) who submits to the Trust a completed Application, a Social Security or taxpayer identification number, and an address in the United States, for each of the Account Owner and the Designated Beneficiary, and (2) who otherwise meets the qualifications set forth in federal law, Connecticut law, and the regulations governing the Trust. A Scholarship Sponsor who establishes a Scholarship Account shall provide the valid Social Security numbers or taxpayer identification numbers and addresses in the United States of each Designated Beneficiary of the applicable Scholarship Account prior to or in connection with a request for a Distribution.

(c) Participation Agreements. The Participation Agreement shall be incorporated by reference in the Application and set forth the terms governing an Account in the Trust. To participate in the Trust, a prospective Account Owner shall submit a completed Application and an initial Contribution, as described in the Application. The Participation Agreement shall provide that the Account Owner shall retain ownership of payments made under the Program to an Account in the name of the Account Owner and for the benefit of the Designated Beneficiary. Any amendment to the Statute or to regulations adopted by the Trustee shall automatically amend the Participation Agreement, and any amendments to the operating procedures and policies of the Program shall amend the Participation Agreement no later than thirty (30) days after adoption by the Trustee. Each Participation Agreement shall provide that the Participation Agreement may be canceled upon the terms and conditions set forth in the Participation Agreement, subject to subsection (j) of this section.

(d) Accounts. Upon receipt of a completed Application and an initial Contribution, the Trust shall open an Account in the name of the Account Owner for the benefit of a Designated Beneficiary. Only one Account Owner is permitted per Account, except for Accounts established prior to March 13, 2000 for which certain married individuals elected to hold ownership as joint Account Owners. Only one Designated Beneficiary is permitted per Account, except that Scholarship Accounts may be established by a Scholarship Sponsor for the benefit of one or more present or future Designated Beneficiaries. One or more Account Owners may establish Accounts for the same Designated Beneficiary.

(e) Contributions. All Contributions to Accounts shall be in cash. "Cash" shall include, but not be limited to, (1) checks drawn on a banking institution located in the United States in U.S. dollars, other than cashiers' checks, travelers' checks or third-party checks exceeding $10,000, (2) money orders, (3) payroll deduction, and (4) electronic fund transfers. Cash does not include real or personal property.

(f) Account Balance Limit on Contributions. Contributions to an Account shall be rejected and returned to the extent the amount of the Contribution would cause the Account Balance of the Account, together with the balance in all other accounts established in the Trust for the benefit of the same Designated Beneficiary, to exceed the Account Balance Limit on Contributions.

(g) Changes to Designated Beneficiary. To the extent such change would not cause the balance in all Accounts established for the new Designated Beneficiary to exceed the Account Balance Limit on Contributions, an Account Owner may change the Designated Beneficiary for an Account to any Member of the Family of the current Designated Beneficiary at any time, without penalty, by submitting a completed change of Designated Beneficiary form to the Trust in such form as the Trust may specify from time to time. Any change of Designated Beneficiary by an Account Owner other than as permitted in this subsection shall be a Non-Qualified Distributions.

(h) Rollover Distributions.

(1) To the extent such change would not cause the balance in all Accounts established for the new Designated Beneficiary to exceed the Account Balance Limit on Contributions, an Account Owner may transfer, in a Rollover Distribution, all or part of the Account Balance to:

(A) an Account established for another Designated Beneficiary who is a Member of the Family of the current Designated Beneficiary; or

(B) an account in another Qualified Tuition Program for another beneficiary who is a Member of the Family of the current Designated Beneficiary.

(2) No more than once in any twelve (12) month period, an Account Owner may transfer, in a Rollover Distribution, all or part of the Account Balance to an account in another Qualified Tuition Program for the same Designated Beneficiary.

(3) A request for a Rollover Distribution shall be in such form and accompanied by such documentation as the Trust shall specify.

(i) Changes of Account Ownership. An Account Owner may transfer ownership of an Account to another Person, subject to applicable taxes, if any, and upon receipt of a request for change of Account Owner that satisfies the criteria set forth in this subsection, the transferee shall be considered the Account Owner for all purposes related to the Trust, regardless of the source of subsequent Contributions.

(1) General Rule. Any such change of Account ownership shall be effective provided that the transfer (A) is irrevocable, (B) transfers all ownership, reversionary rights, and powers of appointments, such as the power to change the Designated Beneficiary and to direct Distributions from the Account, and (C) is submitted to the Trust on a change of account owner form in such form as the Trust may specify from time to time and completed by the Account Owner or, in the event of the death of the Account Owner, by the personal representative of his or her estate. If the Account is held by joint Account Owners, each spouse shall execute the transfer of ownership.

(2) Designation of Contingent Account Owners. Any Account Owner who is an individual person may designate a contingent Account Owner for the Account, to become the owner of the Account automatically upon the death of such Account Owner. Joint Account Owners may designate a contingent Account Owner who shall become the Account Owner upon the death of the last surviving joint Account Owner. Prior to the initial action taken by the contingent Account Owner following the death of the deceased Account Owner(s), the contingent Account Owner shall provide a certified copy of a death certificate sufficiently identifying said deceased Account Owner(s) by name and Social Security number or taxpayer identification number, or such other proof of death as is recognized under applicable law.

(j) Cancellation. An Account Owner may cancel a Participation Agreement at any time by submitting to the Trust a written request for such cancellation or by such other method specified in the Participation Agreement.

(k) Separate Accounting. The Trust shall provide separate accounting in accordance with the requirements of Section 529 of the Internal Revenue Code for each Designated Beneficiary.

Notes

Conn. Agencies Regs. § 3-22h-5

Adopted effective June 5, 2003; Amended February 2, 2005; Amended September 13, 2016