Forbes writes about decanting trusts in its article, “Old Money, New Bottle: Decant If You Don’t Like The Terms Of An Old Trust.” The article begins as follows:
It used to be an irrevocable trust was really irrevocable. Now 25 states allow you to change the terms of an old trust by a newfangled process called decanting. It’s done without going to court, sometimes behind beneficiaries’ backs. And yes, that’s legal.
“Now you have clients saying, ‘Hey, we want to change this trust,’ and I tell them, ‘You can do it.’ You don’t have to have a reason other than you don’t like the terms,” says Jonathan Forster, an estate lawyer with Greenberg Traurig in McLean, Va. “ Decanting is all the rage. ”
Technically it’s the trustee, who has a fiduciary duty to all of the beneficiaries of the trust, who has to initiate a decanting. You’re doing a rewrite by distributing assets from an old trust into a new trust with new terms, for the benefit of one or more of the beneficiaries of the first trust. It’s called decanting because it’s like pouring wine from a bottle into a decanter, and leaving the residue (or unwanted trust terms) behind.
See full article at: Old Money, New Bottle: Decant If You Don’t Like The Terms Of An Old Trust
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.