We all need a “do-over” from time to time. Life changes, the law changes and professionals learn to do things in a better way. Often times clients set up and fund an irrevocable trust and then return, wanting to change the terms of the trust. This sometimes happens within a matter of days after funding the trust. Change is a fact of life! Fortunately, irrevocable trusts can be changed and one way to make that change is to decant the original trust. Decanting is known as a “do-over.” Funds from an existing trust (with less favorable terms) are distributed to a new trust (with more favorable terms).
As the name may suggest, decanting a trust is similar to decanting wine. You take wine from one bottle and transfer it to another (decanter) – leaving the unwanted sediment in the original bottle, one can pour the assets of one trust into a new trust, leaving the unwanted terms in the original trust. If you are not sure how a decanting trusts works, contact a Decanting Trusts Attorney in Franklin, TN. In order to do that, you can call the Music City Estate Law at (615) 628-7775 to schedule an appointment with our Tennessee Decanting Trusts Attorney. We have qualified and experienced lawyers and attorneys working at our office. Whether you’re looking to get in touch with a Franklin Decanting Trusts Attorney, a Decanting Trusts Lawyer in Davidson County, a Brentwood Decanting Trusts Attorney, or a Decanting Trusts Attorney in Williamson County, just give us a call at (615) 628-7775.
Legitimate Reasons to Decant
- To lengthen the term of a trust
- If the tax law changes in the state where the trust was set up and you want to take advantage of better rates in other states
- To change or add a beneficiary
- To help families rework a trust that may be outdated or obsolete
The Decanting Process
1. Check the Decanting Statute Relevant to the Trust’s State Law.
Does the applicable state have a decanting statute? If not, then one option is to decant under the “common law” authority to decant. However, that is risky, since there are no state guidelines. Therefore, this option is not recommended. If the applicable state does have a decanting statute, then does the statute allow the trustee to make the desired changes? If so, then the trust can be decanted using that state law and you can skip to the third step below. But if not, then does another state offer a decanting statute that will allow the change to be made?
2. Move the Trust.
If the trust’s current jurisdiction does not have a decanting statute or the existing statute is either not user friendly or does not allow for the desired modifications, it’s time to review the trust and determine if it can be moved to another jurisdiction. If so, we can make that happen, including adding a trustee or co-trustee and taking advantage of that jurisdiction’s laws. If not, we can petition the local court to move the trust.
3. Decant the Trust.
We will prepare whatever documents are necessary to decant the trust by “pouring” the assets into a trust with more favorable terms. All statutory requirements must be followed and state decanting statutes referenced.
4. Transfer the Assets.
The final step is simply transferring assets from the old trust into the new trust. While this can be effectuated in many different ways, the most common are by deed, assignment, change of owner/beneficiary forms and the creation of new accounts.
Get the Most From Your Trust
Although irrevocable trusts are commonly thought of as a document which cannot be revoked or changed, that isn’t quite true. Do you feel bound to a less-than-optimal trust? If so, The Law Offices of Justin M. Gilbert would love to review your trust to determine whether decanting would benefit your specific situation. We have experienced and qualified lawyers and attorneys inFranklin, Brentwood, Nolensville, Springhill, Arrington, College Grove, Thompson’s Station, Columbia, Leipers Fork and Fairview, give us a call at (615) 628-7775 to talk to our qualified attorneys and lawyers.