Proving once again that trust situs matters, South Dakota is ranked as having the top decanting statute in the nation. Published by Nevada attorney Steve Oshins, the new Annual Decanting State Rankings Chart, is an excellent resource for advisors and clients because of Oshins’ methodical and objective approach to evaluating the factors that impact the viability of a state’s decanting statute. Oshins employs the same methodical approach he brings to the Dynasty Trust State Rankings Chart and the Domestic Asset Protection Trust State Rankings Chart.
Decanting, appropriately referred to by Oshins as a “do over”, is essentially distributing assets from an irrevocable trust to 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. Therefore, 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 also creates a streamlined option for easily transferring a trust from one state jurisdiction to another more favorable jurisdiction, such as South Dakota.
Oshins’ rankings accentuate the vital importance of considering alternative trust jurisdictions in the wealth and trust planning process to ensure that clients are availing themselves of the most progressive trust laws in the country. This is particularly important for planners when determining the most robust dynasty trust state, the most compelling asset protection statute, and the most flexible decanting statute allowing for changes to an irrevocable trust once considered unchangeable.
For more information about how decanting works or how to transfer jurisdiction of a trust to South Dakota, please feel free to contact us via our contact page.