Probate & Trust Law Section Conference Manual ... - Minnesota CLE

D. Change Governing Law
E. Trustee Change
F. Provide for Advisors, Trust Protectors or Directed Trustees
G. Divide a Trust
H. Consolidate Trusts
I. Correct Scrivener’s Error or Ambiguity
J. Add or Remove Spendthrift Provisions
K. Create a Supplemental Needs Trust
L. Limit a Beneficiary’s Rights, or Eliminate a Beneficiary
M. Add a Beneficiary (with a Power of Appointment)
N. Convert Non-Grantor Trust to Grantor Trust
O. Convert Grantor Trust to Non-Grantor Trust
III.
Is Decanting Permitted Under a Particular State Statute?
A. Terminology: First and Second Trust. Under some statutes, the term “first
trust” refers to the original trust, and the trust into which the first trust is being
decanted is referred to as the “second trust.” Thus the first trust is akin to the
original bottle of the wine, and the second trust is the decanter. In other state
statutes, the “first trust” may be referred to as the “old trust,” the “invaded trust”
or the “original trust,” and the “second trust” may be referred to as the “new trust”
or the “appointed trust.”
B. Applicability of State Statute. In order to determine whether the decanting
statute of a particular state can be used, first the statute should be reviewed to see
if it contains specific provisions defining the trusts to which it applies. For
example, the statute may require that its state law govern the administration of the
trust or the construction of its terms. See Section VIII. Generally, decanting is
available to trusts regardless of whether they were established before or after the
enactment of the decanting statute.
C. What Trusts May Be Decanted? Generally, the state statutes will apply to
irrevocable, but not revocable trusts. Some statutes may make a distinction
between inter vivos and testamentary trusts. Typically, the second trust may be
either a trust already in existence or a new trust created for purposes of decanting.
Commonly, a trust may be decanted in whole or in part and may be decanted to
more than one trust.
2