While you may have heard the term used in discussions about wine, the word “decanting” has very specific legal meaning when you’re dealing with a trust. In the state of Florida there is no specific law that allows trustees to decant trust property and transfer the property to a newly created trust, but it may still be possible to do so. While you will want to speak to an experienced and qualified attorney about the particular details surrounding decanting, here are the basics you need to know.
If the trust allows for it, a trustee can take trust property and transfer it to a new trust as long as the transfer benefits the trust beneficiaries. The trustee cannot simply decide to create a new trust for any reason, but instead must be decanting the property for a specific benefit.
Trust decanting is typically used when, for example, a trust established years ago is unable to take advantage of newly created legal or tax protections. In such a situation the trustee might want to create a new trust that takes advantage of recent changes.
Decanting is often used with irrevocable trusts, those trusts created by a grantor that have terms that cannot be changed once the trust is created. However, the power to decant the trust property doesn’t actually change any of the trust terms. Instead, what it does is create a new trust with new terms. Because of that, and because the trustee is acting in the beneficiary’s interests, the trustee is effectively allowed to create a new irrevocable trust.
Latest posts by Timothy P. Murphy (see all)
- Special Needs Planning Offers Critical Protections - January 21, 2019
- Differences Between a “Conservator” and a “Guardian” - January 19, 2019
- Who is Eligible for Veterans Aid and Attendance Benefits? - January 17, 2019