Walny Legal Cautions Wisconsin on Limiting Trust Decanting Powers
By Sumeeta Krishnaney & Eido Walny | Wisconsin Law Journal, April 29, 2014
In a detailed analysis, Eido Walny, founder of Walny Legal Group LLC, co-authored a critique of Wisconsin’s updated Trust Code, which introduces a new decanting provision. While the ability to “decant”—transfer assets from one irrevocable trust to another—promises flexibility in correcting outdated or poorly drafted trusts, the authors argue that Wisconsin’s version is overly restrictive.
Walny and Krishnaney identified five key limitations in the law:
- Principal invasion power – Trustees lack necessary authority to shift beneficiaries.
- Non-liberalization of distribution standards – Stifles beneficial enhancements to trust terms.
- Strict distribution restrictions – Prevents strategic modifications common in other states.
- Required disclosures – Eliminates privacy by mandating trustee notifications.
- Court approval for objections – Reintroduces cost and delay, defeating the purpose of streamlined trust updates.
They caution that Wisconsin’s stringent rules could drive wealthy families to other states with more flexible statutes, resulting in a loss of trust business for Wisconsin and diminished asset protection options for clients.
Full article available at:
Wisconsin Law Journal – Missed opportunity: Why Wisconsin’s new decanting statute falls short
By Sumeeta Krishnaney & Eido Walny | Published April 29, 2014