A trustee with discretionary distribution power may distribute to a second trust with different terms. Statutes limit changes to beneficial interests and require notice to beneficiaries.
Authority derives from the distribution power.
Alternative Names:
Trust Decanting|Distribution to New Trust
Why it Matters?
The scope of the underlying distribution power determines what decanting can accomplish, since a trustee with limited discretion subject to an ascertainable standard has correspondingly limited decanting authority compared to one with absolute discretion. Notice requirements also give beneficiaries an objection window. Decanting cannot add beneficiaries or accelerate remainder interests under most statutes, which limits its use for beneficial restructuring.
Frequently Confused with
Related terms
Frequently asked questions
What determines decanting authority?
What cannot decanting accomplish?
