Decanting has emerged as a very compelling planning option for advisors across the nation. Appropriately referred to as a “do over”, decanting is essentially distributing assets from an irrevocable trust into a new trust with different, and presumably more desirable and flexible, terms leaving the unwanted terms in the original trust and not binding on the assets.
The concept of decanting has become a very powerful tool for planners to modify irrevocable trusts and has emerged as one of the most progressive planning strategies available in dealing with irrevocable trusts and dynasty planning issues. Decanting is also a streamlined option for easily transferring a trust from one state jurisdiction to another more favorable jurisdiction, such as South Dakota, with directed and asset protection trust statutes.
The below video further defines the concept of decanting, looks at when decanting is useful in the planning process, and compares decanting statutes from across the nation.
For additional information on decanting and other progressive trust laws now available to planners, please feel free to contact us via our contact page.