Ferri v. Powell-Ferri

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SJC-12070

MICHAEL J. FERRI, trustee,1 & others2 vs. NANCY POWELL-FERRI
& another.3

Suffolk. November 8, 2016. - March 20, 2017.

Present: Gants, C.J., Botsford, Lenk, Hines, Gaziano, & Budd,
JJ.4

Trust, Assets of trust, Distribution, Irrevocable trust,
Spendthrift provision.

Certification of a question of law to the Supreme Judicial
Court by the Connecticut Supreme Court.

Charles L. Solomont (Nathaniel Bruhn also present) for the
plaintiffs.
Jeffrey J. Mirman for Paul John Ferri, Jr.

1
Of the Paul John Ferri, Jr., Trust and of the Declaration
of Trust for Paul John Ferri, Jr.
2
Anthony J. Medaglia, trustee of the Paul John Ferri, Jr.,
Trust and of the Declaration of Trust for Paul John Ferri, Jr.;
and Maurice T. FitzMaurice, trustee of the Declaration of Trust
for Paul John Ferri, Jr.
3
Paul John Ferri, Jr.
4
Justice Botsford participated in the deliberation on this
case prior to her retirement.
 2

Kenneth Walton (Patricia B. Gary also present) for Nancy
Powell-Ferri.

GAZIANO, J. In this case we are asked to answer three

questions certified to us by the Connecticut Supreme Court

concerning the authority of a trustee to distribute (i.e., to

decant) substantially all of the assets of an irrevocable trust

into another trust. The questions, arising out of divorce

proceedings pending in Connecticut between Nancy Powell-Ferri

and her husband Paul John Ferri, Jr., the beneficiary of a

Massachusetts irrevocable trust, are as follows:

"1. Under Massachusetts law, did the terms of the
Paul John Ferri, Jr. Trust (1983 Trust) . . . empower its
trustees to distribute substantially all of its assets
(that is, to decant) to the Declaration of Trust for Paul
John Ferri, Jr. (2011 Trust)?

"2. If the answer to question 1 is 'no,' should
either 75% or 100% of the assets of the 2011 Trust be
returned to the 1983 Trust to restore the status quo prior
to the decanting?

"3. Under Massachusetts law, should a court, in
interpreting whether the 1983 Trust's settlor intended to
permit decanting to another trust, consider an affidavit of
the settlor . . . , offered to establish what he intended
when he created the 1983 Trust?"

For the reasons we discuss, we answer the first question and

third questions yes, and do not answer the second question.

1. Facts and procedural history. We recite the relevant

facts presented in the Connecticut Supreme Court's statement of

facts for certification to this court.
 3

The Paul John Ferri, Jr. Trust, dated June 24, 1983 (1983

Trust), was settled by Paul J. Ferri for the sole benefit of his

son, Paul John Ferri, Jr. (Ferri Jr. or beneficiary), when Ferri

Jr. was eighteen years old. The trust was created in

Massachusetts and is governed by Massachusetts law.

The 1983 Trust establishes two methods by which trust

assets are distributed to the beneficiary. First, the trustee

may "pay to or segregate irrevocably" trust assets for the

beneficiary.5 Second, after the beneficiary reaches the age of

thirty-five, he may request certain withdrawals of up to fixed

percentages of trust assets, increasing from twenty-five per

cent of the principal at age thirty-five to one hundred per cent

after age forty-seven.

Ferri Jr. and Powell-Ferri were married in 1995. In

October, 2010, Powell-Ferri filed an action in the Connecticut

Superior Court to dissolve the marriage. See Ferri v. Powell-

Ferri, 317 Conn. 223, 225 (2015). In March, 2011, the then

trustees of the 1983 Trust, Michael J. Ferri and Anthony J.

Medaglia, created the Declaration of Trust for Paul John Ferri,

Jr. (2011 Trust). They subsequently distributed substantially

5
The beneficiary also may request, within thirty days of a
gift to the trust, and subject to the donor's veto of any or all
such distribution, to withdraw up to the amount of the gift,
preferably from the gift property.
 4

all of the assets of the 1983 Trust to themselves as trustees of

the 2011 Trust.

As with the 1983 Trust, Ferri Jr. is the sole beneficiary

of the 2011 Trust. The 2011 Trust is a spendthrift trust; under

paragraph 1(a), the trustee exercises complete authority over

whether and when to make payments to the beneficiary, if at all,

and the beneficiary has no power to demand payment of trust

assets. The spendthrift provision, in paragraph 4(b), bars the

beneficiary from transferring or encumbering his interest and,

as with similar provisions in the 1983 Trust, shields the trust

from the beneficiary's creditors. The trustees decanted the

1983 Trust out of concern that Powell-Ferri would reach the

assets of the 1983 Trust as a result of the divorce action.

They did so without informing the beneficiary and without his

consent.

At the time of the decanting, pursuant to art. II.B of the

1983 Trust, Ferri Jr. had a right to request a withdrawal of up

to seventy-five per cent of the principal. During the course of

this action, his vested interest matured into one hundred per

cent of the assets the 1983 Trust.

In August, 2011, the plaintiff trustees of the 1983 Trust

and the 2011 Trust (trustees) commenced a declaratory judgment

action against Powell-Ferri and Ferri Jr. in the Connecticut

Superior Court, seeking a declaration that (1) the trustees
 5

validly exercised their powers under the 1983 Trust to

distribute and assign the property and assets held by them as

trustees of the 1983 Trust to the 2011 Trust; and (2) Powell-

Ferri has no right, title, or interest, directly or indirectly,

in or to the 2011 Trust or its assets, principal, income, or

other property. Powell-Ferri moved for summary judgment, and

the trustees file a cross motion. In support of their cross

motion, to demonstrate the intent of the settlor of the 1983

Trust, the trustees filed an affidavit from Paul J. Ferri, Sr.,

dated July 11, 2012.

In August, 2013, the trial judge granted Powell-Ferri's

motion for summary judgment and denied the trustees' cross

motion, after first having allowed Powell-Ferri's motion to

strike the affidavit. In a subsequent memorandum of decision

explaining the reasons for the allowance of Powell-Ferri's

motion, and awarding specific remedies, the judge ordered

restoration of seventy-five per cent of the assets of the 2011

Trust, as they were held in the 1983 Trust; an accounting of the

2011 Trust from inception to the date of restoration; and an

award of reasonable attorney's fees to Powell-Ferri.

2. Discussion. The interpretation of a written trust is a

matter of law to be resolved by the court. See Mazzola v.

Myers, 363 Mass. 625, 633 (1973). The rules of construction of

a contract apply similarly to trusts; where the language of a
 6

trust is clear, we look only to that plain language. See

Harrison v. Marcus, 396 Mass. 424, 429 (1985). "Determining the

existence of a contract ambiguity [also] presents a question of

law for the court; when a trial judge undertakes the

interpretation of an unambiguous contract, the judge's ruling is

subject to plenary review on appeal." Bank v. Thermo Elemental

Inc., 451 Mass. 638, 648 (2008), and cases cited.

In deciding whether there is ambiguity, "the court must

first examine the language of the contract by itself,

independent of extrinsic evidence concerning the drafting

history or the intention of the parties." Id. at 648, citing

General Convention of the New Jerusalem in the U.S. of Am., Inc.

v. MacKenzie, 449 Mass. 832, 835–836, 838 (2007) (analyzing

indemnity provision in lease of real property held in trust).

Language is ambiguous "where the phraseology can support a

reasonable difference of opinion as to the meaning of the words

employed and the obligations undertaken." Bank, 451 Mass. at

648, quoting President & Fellows of Harvard College v. PECO

Energy Co., 57 Mass. App. Ct. 888, 896 (2003). If a court

concludes that such ambiguity exists, "[w]hen interpreting trust

language, . . . we do not read words in isolation and out of

context. Rather we strive to discern the settlor's intent from

the trust instrument as a whole and from the circumstances known

to the settlor at the time the instrument was executed."
 7

Hillman v. Hillman, 433 Mass. 590, 593 (2001), citing Pond v.

Pond, 424 Mass. 894, 897 (1997).

"It is fundamental that a trust instrument must be

construed to give effect to the intention of the donor as

ascertained from the language of the whole instrument considered

in the light of circumstances known to the donor at the time of

its execution." Watson v. Baker, 444 Mass. 487, 491 (2005),

quoting Powers v. Wilkson, 399 Mass. 650, 653 (1987).

"[E]xtrinsic evidence may be admitted when a contract is

ambiguous on its face or as applied to the subject matter. The

initial ambiguity must exist, however . . . . [E]xtrinsic

evidence cannot be used to contradict or change the written

terms, but only to remove or to explain the existing uncertainty

or ambiguity." General Convention of the New Jerusalem in the

U.S. of Am., Inc., 449 Mass. at 836. "In determining the

meaning of a contractual provision, the court will prefer an

interpretation 'which gives a reasonable, lawful and effective

meaning to all manifestations of intention, rather than one

which leaves a part of those manifestations unreasonable,

unlawful or [of] no effect'" (citation omitted) Siebe, Inc. v.

Louis M. Gerson Co., 74 Mass. App. Ct. 544, 550 n.13 (2009).
 8

We first authorized the trustee of an irrevocable trust to

decant a trust in Morse v. Kraft, 466 Mass. 92, 99 (2013).6 In

that case, we allowed the trustee to decant four subtrusts into

four new subtrusts, one for each of the named beneficiaries, who

had been minors when the first trust was created and who had

reached the age of majority before the trust was decanted. Id.

at 93. In doing so, we relied on specific language in the

trust, which did not explicitly authorize decanting, and the

trustee's broad powers under that trust instrument. Id. at 97,

99. We declined, however, to recognize an inherent power

allowing a trustee to decant irrespective of the language of the

trust. Id. at 99. Accordingly, a trustee's decanting authority

turns on the facts of each case and the terms of the instrument

that establishes the trust. Id. at 97.

With these standards in mind, we turn to consideration of

the questions certified by the Connecticut Supreme Court.

a. Question 1. The term decanting ordinarily is "used to

describe the distribution of [irrevocable] trust property to

another trust pursuant to the trustee's discretionary authority

to make distributions to, or for the benefit of, one or more

beneficiaries [of the original trust]." Morse, 466 Mass. at 95.

Decanting has the effect of "amend[ing] an unamendable trust, in

6
That decision was issued during the pendency of the
proceedings in the Connecticut court; the trustees filed a copy
of the decision in that court in July, 2013.
 9

the sense that [the trustee] may distribute the trust property

to a second trust with terms that differ from those of the

original trust." Id. The rationale underlying the authority to

decant is that if a trustee has the discretionary power to

distribute property to or for the benefit of the beneficiaries,

the trustee likewise has the authority to distribute the

property to another trust for the benefit of those same

beneficiaries. Id.

In the absence of a specific statutory provision allowing

decanting, we have determined that a trustee of a Massachusetts

irrevocable trust may be given the authority to decant assets in

further trust through language in the trust. Id. In

determining whether a trustee has such authority, the intent of

the settlor is "paramount." Id. at 98. See C.E. Rounds, Jr., &

C.E. Rounds, III, Loring & Rounds: A Trustee's Handbook § 6.1.2

(2017) (Loring & Rounds). See also P.M. Annino, Estate Planning

§ 13.42 (3d ed. 2007) (trust decanting). While we explicitly

have declined to adopt a formulaic rule regarding trustees'

powers to decant trust assets, see Morse, 466 Mass. at 99, some

general principles provide guidance. The authority to decant

need not be expressly granted to the trustee in the declaration

of trust, id. at 98; a court may conclude that such authority

exists based on other trust language, id. at 96-97. The

determination is reached by assessing the terms of a particular
 10

trust instrument and other relevant evidence of the settlor's

intent. Id. at 97. When deciding whether a particular trust

authorized a trustee to decant, "the language used by the donor

viewed in light of the rule of law in effect . . . at the time

the powers in question were created" is "particularly

significant" (citation omitted). Id. at 98. See S.M. Dunphy,

Probate Law and Practice § 39.2 (2d ed. 1997) (powers of

trustees).

Here, after having examined the extremely broad authority

and discretion afforded the trustees by the 1983 Trust

declaration of trust, the anti-alienation provision of the 1983

Trust, the beneficiary withdrawal rights afforded under the

terms of the 1983 Trust, and the settlor's affidavit, we

conclude that the terms of the 1983 Trust, read as a whole,

demonstrate the settlor's intent to permit decanting.

i. Trustee's discretion. A trustee's broad discretion to

distribute the assets of an irrevocable trust may be evidence of

a settlor's intent to permit decanting. In Morse, 466 Mass. at

98, for instance, we noted the trustee's "almost unlimited"

discretion, and that the only constraint on the discretion to

"distribute property directly to, or [to apply it] for the

benefit of, the trust beneficiaries, [was] . . . that such

distributions must be 'for the benefit of' such beneficiaries."

We considered also that the trustee in that case had the
 11

authority to "exercise his 'full power' and 'discretion,'"

without seeking prior court approval. Id. at 99. States that

have enacted explicit decanting provisions similarly look to a

trustee's broad authority to distribute principal from the trust

for the benefit of one or more of the beneficiaries when

determining whether the trustee has the authority to decant.

See, e.g., Fla. Stat. § 736.04117.7 Indeed, having reviewed what

she concluded were the then eleven states to have enacted

explicit statutory provisions allowing decanting, the

Connecticut trial court judge noted this in her decision and

commented that, if appropriate at all, the authority to decant

would be, in her view, contingent upon a very broad discretion

on the part of a trustee.

The 1983 Trust contains three provisions relative to the

trustee's discretion to distribute assets that are virtually

7
Florida Statutes § 736.04117 provides in relevant part:

"(1)(a) Unless the trust instrument expressly provides
otherwise, a trustee who has absolute power under the terms
of a trust to invade the principal of the trust, referred
to in this section as the 'first trust,' to make
distributions to or for the benefit of one or more persons
may instead exercise the power by appointing all or part of
the principal of the trust subject to the power in favor of
a trustee of another trust, referred to in this section as
the 'second trust,' for the current benefit of one or more
of such persons under the same trust instrument or under a
different trust instrument; provided:

"1. The beneficiaries of the second trust may include
only beneficiaries of the first trust . . . ."
 12

identical to provisions in the Morse trust. Article II.A

provides, "So long as [the beneficiary] is living, [the trustee]

shall, from time to time, pay to or segregate irrevocably for

later payment to [the beneficiary], so much of the net income

and principal of this trust as [the trustee] shall deem

desirable for [the beneficiary's] benefit . . . ." Article V.A

states, "Wherever provision is made hereunder for payment of

principal or income to a beneficiary, the same may instead be

applied for his or her benefit." In addition, art. VI provides

that the trustee "shall have full power to take any steps and do

any acts which he may deem necessary or proper in connection

with the due care, management and disposition of the property

and income of the trust hereunder . . . in his discretion,

without order or license of court."

The 1983 Trust also contains a number of additional

provisions authorizing the trustee to distribute assets.

Article II (Disposition of the Trust Property) sets forth the

means by which the trustee may "dispose of the trust property"

during the beneficiary's life. Article II.A states that, so

long as the beneficiary is living, the trustee shall "from time

to time, pay to or segregate irrevocably for later payment to

[the beneficiary], as much of the net income and principal of

this trust as [the trustee] shall deem desirable for [the

beneficiary's] benefit" (emphasis supplied).
 13

Viewing the language of the 1983 Trust in its entirety, the

trustee's extremely broad discretion is evident throughout the

trust instrument. The 1983 Trust plainly allows the trustee far

more expansive discretion to act than even the broad discretion

we recognized in Morse, supra, with no oversight other than the

requirement to provide reporting from time to time at the

request of the beneficiary.

The explicit authority of the trustee of the 1983 Trust to

"segregate irrevocably for later payment to" the trust

beneficiary further indicates the settlor's intention to allow

decanting. In common usage, to "segregate" means "to separate

or set apart from others or from the general mass or main body:

isolate," "to cause or force the separation of," "to separate or

withdraw (as from others or from a main body)." Webster's Third

New International Dictionary 2056-2057 (2003) (Webster's). See

Black's Law Dictionary 1563 (10th ed. 2014) (defining

"segregate" as "[t]o separate or make distinct from others or

from a general aggregate; to isolate" and "[t]o cause or require

separation from others"). "Irrevocable" means "incapable of

being recalled or revoked" and "unalterable." Webster's, supra

at 1196. Decanting trust assets to an irrevocable trust is one

way to "segregate" assets "irrevocably." See Morse, 466 Mass.

at 98, quoting Loring v. Karri-Davies, 371 Mass. 346, 349-350

(1976) ("We believe that 'it is fair to suppose that the [donor]
 14

in using the language which appears in the [trust] had in mind

the interpretation of similar words and clauses").

This interpretation of art. II.A is supported by language

in art. V.A: "Wherever provision is made hereunder for payment

of principal or income to a beneficiary, the same may instead be

applied for his or her benefit" (emphasis supplied). This power

parallels the language and grant of authority that we concluded

authorized decanting in Morse, 466 Mass. at 96-98 (trust

authorized decanting under trustee's power to "pay to"

beneficiary or to apply payments of income or principal for

benefit of beneficiary). We stated explicitly in Morse that we

declined to rely on a particular form of words in determining

whether the language of a particular trust allowed decanting,

and that we would focus foremost on determining the settlor's

intent. Here, however, where the language of the trust is

almost identical to that we found to have conveyed the authority

to decant in Morse, and where the settlor's intention to convey

to the trustee almost unlimited discretion to act is evident,

the conclusion that the settlor intended to authorize decanting

would seem to follow necessarily.

There are, however, two sections of the trust language that

might suggest, as Powell-Ferri argues, a conclusion to the

contrary, and we turn next to these provisions.
 15

ii. Anti-alienation provision. Article V.B of the 1983

Trust provides that "[n]either the income nor the principal of

any trust hereunder shall be alienable by any beneficiary . . .

and the same shall not be subject to be taken by his or her

creditors by any process whatever." When interpreting trust

language, words should not be read "in isolation and out of

context." Hillman, 433 Mass. at 593. Courts "strive to discern

the settlor's intent from the trust instrument as a whole and

from the circumstances known to the settlor at the time the

instrument was executed." Id. Viewing the 1983 Trust document

"as a whole, and giving due weight to all of its language," id.,

we conclude that empowering the trustee to decant is consistent

with this anti-alienation provision.

We have said, when confronting similar language, that this

type of anti-alienation provision "evidences the settlor's

intent to protect the trust income and principal from invasion

by the beneficiary's creditors." Bank of New England v.

Strandlund, 402 Mass. 707, 709 (1988). It follows that if a

settlor intended a trust's assets to be protected from

creditors, he or she necessarily intended that the trustee have

the means to protect the trust assets, consistent with his or

her fiduciary duties.8

8
Nancy Powell-Ferri argues that, under Massachusetts law, a
party to a divorce is not a "creditor" for the purposes of this
 16

iii. Beneficiary withdrawal provisions. Article II.B of

the 1983 Trust provides that the trustee "shall pay to [the

beneficiary] after he has attained the age of thirty-five (35)

years such amounts of principal as he may from time to time in

writing request," with explicit limitations on the percentage of

the principal that may be withdrawn at different ages, up to the

age of forty-seven, after which the beneficiary is entitled to

withdraw one hundred per cent of the trust assets.9

At the time the trustees decanted the 1983 Trust assets

into the 2011 Trust, under the terms of art. II.B, the

beneficiary had the right to request a withdrawal of up to

seventy-five per cent of the principal of the 1983 Trust.

During the pendency of this action, the beneficiary reached the

age of forty-seven, and his irrevocable vested interest matured

into one hundred per cent of the corpus of the trust. The

beneficiary states that, throughout the life of the 1983 Trust,

type of provision, and that a trust is marital property subject
to equitable distribution notwithstanding an anti-alienation
provision. See Lauricella v. Lauricella, 409 Mass. 211, 216-217
(1991). Any question concerning the equitable distribution of
the trust assets is not part of the certified questions to this
court and is not properly before us. See DiFiore v. American
Airlines, Inc., 454 Mass. 486, 488 n.4 (2009).
9
The limitations on the percentage of the principal that
the beneficiary may withdraw are as follows: beginning at age
thirty-five, the beneficiary could request in writing a
distribution of up to twenty-five per cent of the trust
principal; after reaching age thirty-nine, up to fifty per cent;
and beginning at age forty-three, up to seventy-five per cent.
Beginning at age forty-seven, there is no limitation.
 17

he has requested and received only a small percentage of the

trust assets.

Powell-Ferri argues that the beneficiary's right under the

1983 Trust to request a withdrawal of a certain percentage of

trust assets is wholly inconsistent with the authority to

decant. She contends that decanting the 1983 trust into the

2011 spendthrift trust impaired the interests of the beneficiary

to withdraw trust assets upon written request.

We do not agree, for three reasons. First, Powell-Ferri's

contention runs counter to our mandate to read trust provisions

consistently with the entire trust document, and in a manner

that gives effect to all trust language. See Hillman, 433 Mass.

at 593 ("When interpreting trust language, . . . we do not read

words in isolation and out of context. Rather, we strive to

discern the settlor's intent from the trust instrument as a

whole . . ."). If the trustee were unable to decant the portion

of trust assets made "withdrawable" as the beneficiary reached

certain age milestones, the trustee correspondingly would lose

the ability to exercise his or her fiduciary duties (including

the duty to invest and protect the assets' purchasing power)

over those assets, eventually losing power to control one

hundred per cent of the assets upon the beneficiary turning

forty-seven years of age, pursuant to art. II.B. Under Powell-

Ferri's interpretation, the trustee effectively would be without
 18

a role upon the beneficiary's reaching the age of forty-seven.

This interpretation makes little sense.

Second, a trustee holds "full legal title to all property

of a trust and the rights of possession that go along with it."

McClintock v. Scahill, 403 Mass. 397, 399 (1988). See Welch v.

Boston, 221 Mass. 155, 157 (1915) ("It is one of the fundamental

characteristics of trusts that the full and exclusive legal

title is vested in the trustee"). Here, at the time the

trustees decanted substantially all of the 1983 Trust's assets

to the 2011 Trust, the beneficiary had withdrawn only a small

percentage of the assets under art. II.B. Therefore, a

substantial portion of the trust assets remained in the 1983

Trust, subject to the trustee's authority and stewardship.

In analyzing the meaning of this provision, it is

instructive to consider the circumstance of the termination of a

trust. When a trust terminates, the beneficiaries obtain a

vested interest in the trust property that is not unlike the

beneficiary's withdrawal right here. Notwithstanding this

vested right, however, the trustee of a terminated trust retains

ongoing duties to control and protect the trust assets, and may

continue to act pursuant to the powers provided under the trust

instrument. See Rothwell v. Rothwell, 283 Mass. 563, 570, 572

(1933) (following trust's termination date, "the duties and

powers of the trustees do not cease" until trust property is
 19

conveyed, and, until such conveyance, "the trustees [have] power

to perform any act incidental to the conservation of the [trust]

property"). See Loring & Rounds, supra at § 8.2.3 ("A trustee

of a terminated trust has continuing fiduciary

responsibilities. . . . It is not until the trustee is done

'winding up' the trust's administration, to include making

distribution 'in a manner consistent with the purposes of the

trust and the interests of the beneficiaries,' is the trustee

relieved of fiduciary duties" [citations omitted]).

Third, this mechanism for the beneficiary's withdrawal of

trust assets does not limit the trustee's decanting authority.

The two mechanisms for distribution provided under art. II are

not mutually exclusive. We read arts. II.A and II.B as

comprising a unified framework governing distribution of the

trust assets whereby, under art. II.B, the beneficiary has a

graduating right of withdrawal of those trust assets that have

not been distributed pursuant to the trustee's payment to him or

to the irrevocable sequestering of trust property under art.

II.A.

Further, in reading arts. II.A and II.B as a coherent

whole, we note that the 1983 Trust empowers the trustee to

segregate assets irrevocably for "[s]o long as [the beneficiary]

is living," in other words, both before the beneficiary's

withdrawal rights began to vest at the age of thirty-five, and
 20

thereafter. This authority is counter to Powell-Ferri's

argument that the settlor intended to bar decanting after the

beneficiary gained withdrawal rights at the age of thirty-five.

If decanting were so barred, art. II.A would not have allowed

irrevocable sequestration for "[s]o long as [the beneficiary] is

living."

Accordingly, reading the entirety of art. II in harmony, it

provides that, unless and until all of the trust assets were

distributed in response to the beneficiary's request for a

withdrawal, the trustee could exercise his or her powers and

obligations under the 1983 Trust, including the duty to decant

if the trustee deemed decanting to be in the beneficiary's best

interest.10,11

b. Question 3. The third certified question asks whether,

under Massachusetts law, a court should consider an affidavit by

the settlor, stating his intent in establishing the 1983 Trust,

10
We are cognizant that the Connecticut judge relied
heavily in her determination that the decanting was not
authorized under the terms of the 1983 Trust based on her
understanding of divorce law in Connecticut, and its policies
that all assets of a marriage on the date that an action for
dissolution is filed are available for later distribution. We
note in this regard, as the trial judge herself apparently
already has anticipated by suggesting an alternative order for
payment of alimony if the decanting is deemed proper, that the
alimony order may be revised in light of this determination as
to the trust assets. See Pfannenstiehl v. Pfannenstiehl, 475
Mass. 105, 106 (2016).
11
Given this, we need not reach Question 2, which is
applicable only if we were to have answered "No" to Question 1.
 21

in reaching a determination whether, in creating the 1983 Trust,

the settlor intended to permit decanting to another trust.

Where, as here, there is any question of ambiguity concerning

the settlor's intent, Massachusetts courts may consider

extrinsic evidence. See, e.g., General Convention of the New

Jerusalem in the U.S. of Am., Inc., 449 Mass. at 835-836.

In determining the settlor's intent on the question of

decanting in Morse, 466 Mass. at 99, we considered the settlor's

affidavit and noted that it provided "affirmative evidence of

the settlor's intent that the terms of the [Morse trust] give

the plaintiff decanting power in the form of affidavits from the

settlor, draftsman, and trustee." We also cited the Restatement

(Third) of Property as further support for the use of

postexecution affidavits as affirmative evidence. See id.;

Restatement (Third) of Property: Wills and Other Donative

Transfers § 10.2 & comment g (2003) ("In seeking to determine

the donor's intention, all relevant evidence, whether direct or

circumstantial, may be considered, including the text of the

donative document and relevant extrinsic evidence"). See also

Loring & Rounds, supra at Introduction ("In the case of an

irrevocable inter vivos trust, the settlor's intentions at the

time of funding are what determine its terms. That having been

said, postfunding statements of the settlor might be admissible

to clarify what those intentions were" [emphasis in original;
 22

footnote omitted]). Indeed, this court has allowed the

reformation of a trust instrument to conform to the settlor's

intent, and has permitted the introduction of an affidavit by

the drafter to show that the language of the instrument was

inconsistent with the intent of the settlor. See Walker v.

Walker, 433 Mass. 581, 587 (2001).

The settlor's affidavit, dated July 11, 2012, states, in

pertinent part:

"I intended to give to the trustee of the 1983 Trust
the specific authority to do whatever he or she believed to
be necessary and in the best interest of my son Paul John
Ferri, Jr. with respect to the income and principal of the
1983 Trust notwithstanding any of the other provisions of
the 1983 Trust. . . . Therefore, if the trustee thought at
any time that the principal and income of the 1983 Trust
could be at risk, the trustee could take any action
necessary to protect the principal and income of the 1983
Trust. . . . This authority to protect assets would also
extend to a situation where creditors of Paul John Ferri,
Jr. may attempt to reach the assets of the 1983 Trust such
as in the event of lawsuit or a divorce."

Because, where there is ambiguity, a court may consider an

affidavit of the settlor in interpreting whether the settlor

intended to permit decanting to another trust, see, e.g., Bank,

451 Mass. at 649, we consider the settlor's affidavit regarding

his intentions at the time that he created the 1983 Trust, which

the Connecticut trial court judge ordered struck on Powell-

Ferri's motion. In considering this affidavit, we do not

"create an ambiguity [where] the plain language is unambiguous."

General Convention of the New Jerusalem in the U.S. of Am.,
 23

Inc., 449 Mass. at 835. Nor do we agree with Powell-Ferri's

argument that the affidavit was offered improperly to alter the

terms of the declaration of trust. Given that the declaration

of the 1983 Trust expressly neither permits nor bars decanting,

the affidavit does not contradict or attempt to vary the terms

of the trust.

The statements in the settlor's affidavit further support

the settlor's evident intention in the language of the

1983 Trust document, including the power to "segregate

irrevocably" under art. II.A and the beneficiary's right to

request withdrawals of trust assets at certain age milestones

under art. II.B, to provide the trustee with the power to

decant. Because the intent of the settlor is "paramount,"

Morse, 466 Mass. at 98, and the settlor's affidavit evidences

the settlor's intent at the time of execution, the settlor's

affidavit should be considered.

3. Disposition. An order shall issue to the Connecticut

Supreme Court answering the certified questions as follows: We

answer Question 1, "Yes"; we do not answer Question 2; and we

answer Question 3, "Yes."

The Reporter of Decisions is directed to furnish attested

copies of this opinion to the clerk of this court. The clerk in

turn will transmit one copy, under the seal of the court, to the

clerk of the Connecticut Supreme Court, as the answer to the
 24

questions certified, and will also transmit a copy to each

party.
 GANTS, C.J. (concurring, with whom Lenk and Budd, JJ.,

join). I agree with the court, for all the reasons given by the

court, that under Massachusetts law the terms of the 1983 Trust

empower its trustees to decant its assets to a trust newly

created by the trustees. I write separately to emphasize what

we did not decide in answering the reported questions certified

to us by the Connecticut Supreme Court: whether Massachusetts

law will permit trustees in Massachusetts to create a new

spendthrift trust and decant to it all the assets from an

existing non-spendthrift trust where the sole purpose of the

transfer is to remove the trust's assets from the marital assets

that might be distributed to the beneficiary's spouse in a

divorce action.

The Connecticut Supreme Court held that, under Connecticut

law, the public policy that would prevent one spouse during a

divorce proceeding from transferring marital assets to deprive

the other spouse of those assets did not apply here because it

was undisputed that the beneficiary husband did not have a role

in creating the new 2011 Trust or in decanting the assets from

the 1983 Trust to the 2011 Trust. Ferri v. Powell-Ferri, 317

Conn. 223, 233-234 (2015). The trial court had found that the

trustees of the 1983 Trust, one of whom was the husband's

brother, did not consult with the husband before taking these

steps to frustrate the wife's equitable claim to these assets.
 2

Our opinion, because it simply answered certified questions from

another State Supreme Court, appropriately did not address

whether we would find the creation of a new spendthrift trust

intended solely to deprive the beneficiary's spouse of marital

assets during a divorce proceeding through a decanting to be

invalid as contrary to public policy under Massachusetts law.

Under the Massachusetts Uniform Trust Code, G. L. c. 203E,

§ 404, "A trust may be created only to the extent its purposes

are lawful and not contrary to public policy." Where, as here,

the trustees created a new spendthrift trust for the sole

purpose of decanting the assets of an earlier trust that, at

least in part, would be included within the marital assets

available for distribution during a divorce proceeding, § 404

would require us to consider whether the creation of the new

spendthrift trust was contrary to public policy.

Before the enactment of § 404, we held under our common law

that a trust is void when it is contrary to public policy. See

Perkins v. Hilton, 329 Mass. 291, 294-295 (1952) (trust for

mother's benefit was "illegal and invalid" where it was part of

attempt by defendant to obtain special benefits of servicemen's

readjustment act to which only veterans are entitled, and was

"in effect a fraud upon the act and contrary to public policy");

Otis v. Prince, 10 Gray 581, 581 (1858) (trust that required

trustee to pay net income from trust to testator's grandson only
 3

"so long as he shall remain unmarried" was void as contrary to

public policy). See generally Restatement (Third) of Trusts

§ 29 (2003) ("An intended trust or trust provision is invalid if

its purpose or performance is unlawful or against public

policy").

Similarly, under our common law of contract, we have

declared that "it is a principle universally accepted that the

public interest in freedom of contract is sometimes outweighed

by public policy, and in such cases the contract will not be

enforced." Beacon Hill Civic Ass'n v. Ristorante Toscano, Inc.,

422 Mass. 318, 321 (1996). We have applied this principle by

declining to enforce various contracts that we concluded were

contrary to public policy. See, e.g., A.Z. v. B.Z., 431 Mass.

150, 160 (2000) (contracts that "compel [a] donor [of frozen

preembryos] to become a parent against his or her will" violate

public policy); Liberty Mut. Ins. Co. v. Tabor, 407 Mass. 354,

360-361 (1990) ("a provision in an insurance policy that

provides coverage only when there is no liability is void as

against public policy"); Osborne v. Osborne, 384 Mass. 591, 599

(1981) ("certain contracts may so unreasonably encourage divorce

as to be unenforceable").

Under our common law of employment, we have held that, in

certain limited circumstances, an employer may be held liable

for discharging an at-will employee "for a reason that violates
 4

clearly established public policy." Upton v. JWP Businessland,

425 Mass. 756, 757 (1997). See, e.g., Flesner v. Technical

Communications Corp., 410 Mass. 805, 810 (1991) (terminating at-

will employee for cooperating with United States Customs Service

officials who were investigating his employer violates public

policy); DeRose v. Putnam Mgt. Co., 398 Mass. 205, 208-211

(1986) (terminating at-will employee for failing to give false

testimony against coworker violates public policy).

I do not offer any prediction as to whether this court

might invalidate as contrary to public policy a new spendthrift

trust created for the sole purpose of decanting the assets from

an existing non-spendthrift trust in order to deny the

beneficiary's spouse any equitable distribution of these trust

assets. I simply make clear that, in this opinion, we do not

decide this issue; we will await a case that presents such an

issue before we decide it.

I also note that the Legislatures of at least twenty-five

States have codified limitations on decanting from one trust to

another by statute.12 If our Legislature were to choose to enact

12Alaska Stat. § 13.36.157; Ariz. Rev. Stat. Ann. § 14-
10819; Colo. Rev. Stat. §§ 15-16-901 et seq.; Del. Code Ann.
tit. 12, § 3528; Fla. Stat. § 736.04117; 760 Ill. Comp. Stat.
5/16.4; Ind. Code § 30-4-3-36; Ky. Rev. Stat. Ann. § 386.175;
Mich. Comp. Laws §§ 556.115a, 700.7820a; Minn. Stat. § 502.851;
Mo. Rev. Stat. § 456.4-419; Nev. Rev. Stat. § 163.556; N.H. Rev.
Stat. Ann. §§ 564-B:4-418, 564-B:4-419; N.M. Stat. Ann. §§ 46-
12-101 et seq.; N.Y. Est. Powers & Trusts Law § 10-6.6; N.C.
 5

its own decanting statute, I would urge it to consider the use

of decanting presented in this case.

Gen. Stat. § 36C-8-816.1; Ohio Rev. Code Ann. § 5808.18; R.I.
Gen. Laws § 18-4-31; S.C. Code Ann. § 62-7-816A; S.D. Codified
Laws §§ 55-2-15 to 55-2-21; Tenn. Code Ann. § 35-15-816; Tex.
Prop. Code Ann. §§ 112.071 et seq.; Va. Code Ann. § 64.2-778.1;
Wis. Stat. § 701.0418; Wyo. Stat. Ann. § 4-10-816.