Broder & Orland, LLC prevails in precedent-setting case allowing for the decanting of trust assets to protect them from a party’s reach in a divorce

On August 8, 2017, the Connecticut Supreme Court issued a decision in the matter of Powell-Ferri v. Ferri, in which it upheld the trial court’s decision dissolving the parties’ marriage and making alternate property distribution and alimony orders.

The Husband, who was represented in the divorce action by Carole Topol Orland and Sarah E. Murray of Broder & Orland, LLC, was the beneficiary of a trust that had been established prior to the parties’ marriage.  The Husband had the right to withdraw principal from the trust when he reached certain ages, though he had not exercised this right except under limited circumstances.  During the dissolution action, without the Husband’s prior knowledge, the Trustees decanted the trust assets into a new spendthrift trust and filed a civil action requesting a ruling that their actions were proper.  The trial court found that the decanting was improper.  The Trustees appealed that decision.

Because an appeal of the trial court’s decision in the civil action remained pending during the divorce trial, the trial court issued alternate orders: if the decanting was found to be invalid, then the Husband was to pay $12 million in lump sum alimony to the Wife in light of the trust assets (and periodic alimony would cease), whereas, if the decanting was found to be valid, no lump sum alimony order would issue and the Husband would only have to pay periodic alimony of $25,000 per month.  The Wife, who had requested at trial an award in excess of $50 million, appealed the decision.  Carole Topol Orland and Sarah E. Murray assisted appellate counsel in defending against this appeal on behalf of the Husband.

The Connecticut Supreme Court, after deciding in the companion civil case that the decanting had been lawful, affirmed the trial court’s dissolution orders.  The trial court’s alternate order of periodic alimony only, with no lump sum alimony award, will be the effective order in the dissolution action.