While irrevocable trusts were once thought to be untouchable this may no longer be true as the practice of “decanting” a trust becomes more commonly used. Decanting lets a trustee, or the manager of the trust, change certain terms by figuratively pouring the assets from an old trust into a new one. So far, 21 states have adopted decanting laws and a group of trust lawyers and professors are drafting a model law to serve as a template for states to use in the future as a model.
Many families use irrevocable trusts to pass wealth to their beneficiaries because of the tax advantages and other benefits the trust offers. So far there are some limits to what decanting can do, as, for instance, trustees cannot change a beneficiary’s already vested interests in a trust.
So what can the act of decanting do? Continue reading