On Nov. 13, 2013, Governor Andrew Cuomo signed into law a bill making a number of clarifying amendments to EPTL §10-6.6, New York’s decanting statute.1 By so doing, New York solidified its status as a leading state championing trust decanting legislation. Decanting is a technique whereby a trustee exercises its discretion to distribute some or all of the corpus of an existing trust to another trust or trusts for the benefit of one or more of the original trust beneficiaries. Depending on the changes the trustee wishes to effectuate through the decanting, the administrative and/or dispositive provisions of the new trust or trusts may be nearly identical or markedly different from those of the initial trust. While decanting is a powerful tool that has become increasingly popular in recent years among estate planners, the use of this device implicates other legal issues that must be considered.
Among the areas potentially affected by the treatment of trust decanting is the commencement of the statute of limitations for a beneficiary to bring a proceeding to compel an accounting by a fiduciary. The 2013 amendment to the New York decanting statute raises this issue for consideration, but how trust decantings will impact the statute of limitations remains far from certain.
