January 20, 2016
Sabino Biondi, a Partner who co-heads Wilk Auslander's Trusts & Estates Practice, recently delivered an engaging presentation, titled: "Changing the Unchangeable: How Decanting can be used to Change Trust Provisions," to a group of nearly 50 attorneys, accountants, financial advisors and fiduciary officers at a program sponsored by Jonathan Shenkman, a Financial Advisor and Portfolio Manager in the Private Client Group at Oppenheimer & Co.
Decanting allows a trustee to reform provisions of an irrevocable trust by transferring assets to a new trust. The name "decanting" originates from the concept of decanting wine. Just as the wine is moved from one vessel (its original bottle) to another vessel (a decanter), so the assets from one trust, are moved into a new trust.
Despite the best intentions of very clever minds, unforeseen circumstances often develop that render provisions in a trust document counter to its original intended purpose. If the trust is revocable, no problem; the grantor simply revokes or amends the trust, changing its provisions to suit its original or newly intended purpose. However, trusts are often designed to be irrevocable for tax or asset protection purposes. In such cases, it has been difficult if not impossible, to change key provisions. An extremely effective, yet underutilized strategy known as decanting, can provide a suitable solution.
Participant feedback about the presentation was uniformly positive. Sabino's mastery of the topic and conversational presentation style was noted by many attendees in their evaluation forms. We may cover decanting in greater detail in the newsletter in a future issue. In the meantime, if you're interested in learning more, please contact Sabino at: sbiondi@wilkauslander.com or call him at 646-375-7661.