How do i prevent decanting of my trust ?

[jstcrazd]

What language would I use in the trust document to prevent the successor trustee from being able to decant my trust after I die?

 

[Zigner]

What US state?

 

[jstcrazd]

Arizona

 

[Zigner]

Arizona

You will want to ensure you have a properly drafted trust that appropriately factors in the many contingencies that may arise. You should consult with a local estate planning attorney.
Please keep in mind that, even with all possible precautions in place, it will be impossible for you to have any direct, personal impact on the matter when it arises.

 

[jstcrazd]

For instance if I stated that upon the death of the trustor this trust agreement shall be unamendable in its entirety?

 

[Zigner]

For instance if I stated that upon the death of the trustor this trust agreement shall be unamendable in its entirety?

Your estate planning attorney will be able to assist you in properly drafting your trust.

 

[quincy]

Here are two links, one to the law and one to the State Bar where you can find an attorney to help you with drafting a trust that meets your wants and needs.

https://law.justia.com/codes/arizona/title-14/section-14-10819/

https://www.azbar.org/for-the-public/

 

[jstcrazd]

Here are two links, one to the law and one to the State Bar where you can find an attorney to help you with drafting a trust that meets your wants and needs.

https://law.justia.com/codes/arizona/title-14/section-14-10819/

https://www.azbar.org/for-the-public/

Ok thank you I was just wondering if that statement would prevent the decanting and I have read the ars title 14 -10819 but it only states (unless the trust expressly provides otherwise ) which seems kinda vague and leaves it kinda open to interpretation.

 

[Zigner]

Ok thank you I was just wondering if that statement would prevent the decanting and I have read the ars title 14 -10819 but it only states (unless the trust expressly provides otherwise ) which seems kinda vague and leaves it kinda open to interpretation.

Please tell me (us) what you believe "decanting" means in this context.

 

[quincy]

Ok thank you I was just wondering if that statement would prevent the decanting and I have read the ars title 14 -10819 but it only states (unless the trust expressly provides otherwise ) which seems kinda vague and leaves it kinda open to interpretation.

You will need the trust document to expressly state that the trust cannot be decanted (e.g., the trustee cannot act at his discretion to alter or modify the terms laid out in the trust). But you will want a legal professional in your area do the wording and the drafting so it can withstand any legal challenge.

 

[Taxing Matters]

I agree — you need an estate planning lawyer who also knows tax law or works with a tax lawyer for this. The reason for that is if you lock down the trustee's ability to amend the trust too tightly you'll eliminate the ability of the trustee to make changes to respond to tax law changes that occur after your death. Without an express provision allowing for tax changes, the trust and its beneficiaries may end up paying more in tax than they would if the trustee is allowed to make changes that are more tax favorable.

Also be aware that it is possible to set up the trust so that it is settled in a state that has more favorable trust law. It doesn't have to be settled in your state. State law does matter. For example, some states will allow for a trust to be dissolved upon agreement of ALL current and future trust beneficiaries, some don't. At least one state — South Dakota, if I recall correctly — allows for setting up a true dynastic trust. That's a trust that can last multiple generations without falling victim to the common law rule against perpetutities. Some states, mine included, have simplified the rule of perpetuities by statute to elminate the traps for the unwary that the common law creates. But not many have gone so far as to completely eliminate the concept of limiting the duration of the trust.

 

[quincy]

Appoint someone who is experienced and who you trust with the trust and you probably don’t have to worry too much about your future beneficiaries.

Many states do not permit the decanting of a trust, as a note.

 

[Taxing Matters]

Many states do not permit the decanting of a trust, as a note.

Right. Another example of why the state in which you choose to have the trust settled matters. For most people using a revocable living trust simply as a will substitute it doesn't make much difference becasuse it works pretty much the same regardless of the state. It's when you want the trust to do something more than just distribute assets after death that the particular state law begins to matter.

 

[jstcrazd]

Please tell me (us) what you believe "decanting" means in this context.

Ok it is my understanding that the act of decanting is pouring the assets of 1 trust into another my only concern is that the new trust can be manipulated in ways less favorable than the trustor intended. I do know what the ars rules say about what things need to preserved in the restatements as far as cannot remove benificuaries or reduce their interests .however I have witnessed how the terms of a trust can be manipulated under the false flag of decanting that had a very negative impact on a benificuary such as reserving paragraphs in the restatements that concealed knowledge of seperate property assets that the trustor wanted to leave for the benificuary .which resulted in the loss of items that were irreplaceable. I do understand that decanting has its benefits and offers certain trust protections to ensure the trust functions properly.. I have asked a few attorneys about this and no one so far has given a definitive answer if a trust states unamendable in its entirety prevents decanting a trust in which a trustee has the ability to make discretionary distributions to the benificuaries.

 

[quincy]

Ok it is my understanding that the act of decanting is pouring the assets of 1 trust into another my only concern is that the new trust can be manipulated in ways less favorable than the trustor intended. I do know what the ars rules say about what things need to preserved in the restatements as far as cannot remove benificuaries or reduce their interests .however I have witnessed how the terms of a trust can be manipulated under the false flag of decanting that had a very negative impact on a benificuary such as reserving paragraphs in the restatements that concealed knowledge of seperate property assets that the trustor wanted to leave for the benificuary .which resulted in the loss of items that were irreplaceable. I do understand that decanting has its benefits and offers certain trust protections to ensure the trust functions properly.. I have asked a few attorneys about this and no one so far has given a definitive answer if a trust states unamendable in its entirety prevents decanting a trust in which a trustee has the ability to make discretionary distributions to the benificuaries.

There are both pros and cons to allowing for the decanting of a trust. That is why you will want to sit down with an experienced attorney in your area that you trust to go over all the ways you can protect yourself and your beneficiaries in the documents that are drafted.

There are several ways other than trusts, for example, to bequeath assets to beneficiaries without the “manipulation” that you fear might come with a trust. These other ways should be explored and considered.

Forums like this are good for dispensing general information, by the way, but you will want all of the specifics of your particular situation personally reviewed by an attorney in your area. FreeAdvice is unable to provide personal reviews.