Matter Of Kroll

971 N.Y.S.2d 863 (2013)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

On December 17, 1992, a trust was created by Moses Ratowsky as the grantor and Rachel Schreiber and Alan D. Kroll as the trustees for the benefit of the grantor's grandson, Daniel Schreiber, Rachel's then 19-month-old son. Moses died in 2008. Alan D. Kroll (P) brought this petition. Daniel is now 21 years of age and suffers from several disabilities and is the recipient of Medicaid and SSI benefits. When the trust was created, Daniel was an infant and had not yet exhibited any of the conditions from which he now suffers. The purpose of the purported decanting is to maintain Daniel's eligibility for government benefits while utilizing the trust assets for his supplemental needs, with the remainder to be payable to Daniel's issue, per stirpes, or if he has no issue, then to his living siblings, per stirpes. The invaded trust was fully discretionary as to income and principal payments while Daniel was a minor. At the age of 21, the trustees were directed to make payments of income to Daniel at least quarterly and are to distribute one-third of the principal to Daniel upon attaining age 25, one-half of the then-remaining principal upon Daniel attaining age 30, and a final distribution of all remaining principal upon Daniel attaining the age of 35. The invaded trust also permits Daniel, upon attaining the age of 21, to withdraw all or any part of the trust principal. The Attorney General of the State of New York (the AG) on behalf of the New York State Department of Health (Ds), the state agency responsible for overseeing the Medicaid program in New York objected to the petition. Daniel's right to withdraw all or part of the trust principal, ($400,000.00), would render him ineligible for Medicaid and other government benefits. As permitted by EPTL 10-6.6(b), Ps purportedly appointed the trust principal from the invaded trust to the appointed trust prior to Daniel's birthday. Ds argued that they were not appointed trustees and hence the transfer was invalid.