Michael Petro’s article in the Buffalo Law Journal is an interesting piece about a relatively new provision of the law which permits us to end an “irrevocable” trust. It’s easy to decant a fine wine but not always so with an irrevocable trust.
Before the law was changed in 2011, ” irrevocable” meant just that. We were required to adhere to the wishes and directions of the trust’s creator even though changing times might have resulted in circumstances that the he or she would have believed warranted a change in the trust. Now it is possible to decant a trust which otherwise would have been irrevocable years after its long-deceased creator conceived of its rules. For example, changes in tax laws over the years can make it extremely desirable to change the trust —or simply end it without the blessing of the trust’s creator who is no longer here to give it although it might be hard to envision him or her not doing so.
However, as Shakespeare would say, “Here’s the rub”. It may sound logical that everyone affected by the trust needs to consent to changing of revoking the instrument. Sometimes, however, it is impossible to gain the consents of all of the siblings who stand to benefit (or lose) by the proposed change. More important is the fact that where minors are beneficiaries or where they have a contingent interest triggered by the death of a parent – beneficiary, their consent is also necessary and may be obtained by the appointment of a guardian ad litem. This may be an expensive and time consuming proceeding so the instrument needs to be reviewed in light of the facts surrounding the beneficiaries and to see whether or not it is cost-effective and whether time will simply make the decanting unnecessary.