Matter of Kroll
New York Surrogate's Court
971 N.Y.S.2d 863 (2013)
Moses Ratowsky created a trust for his one-year-old grandson Daniel Schreiber, naming Daniel's mother Rachel Schreiber and Alan Kroll (plaintiffs) as co-trustees, with terms giving Daniel full access to trust principal and mandated income/principal distributions once he turned 21. After Daniel developed disabilities qualifying him for Medicaid and Supplemental Security Income, and before he turned 21, Kroll and Schreiber sought to decant the existing trust assets into a new supplemental-needs trust to preserve his benefits eligibility once he gained access to the funds; they petitioned the Surrogate's Court for approval, and the New York State Department of Health (defendant), which administers Medicaid, opposed the transfer.
Whether a trustee may decant existing trust assets into a new trust when the beneficiary is eligible to receive trust income or principal in the future.