What Does Decanting a Trust in Florida Mean?
Have you created an irrevocable trust in Florida? Was this done recently, or was it done years ago? If you created it prior to 2007, an irrevocable trust was just that, irrevocable. This means it could not be revoked or changed in any way. However, the answer on whether an irrevocable trust can be changed is more complex.
There is now a way to handle some modifications without going to court in certain situations. This is known as decanting. The term is generally used to refer to the trustee of a trust creating a new one and then moving all the assets into the second trust. This essentially terminates the first trust and the new one would dictate the use of the property in the trust.
In 2018, Florida revised the decanting statute and it has strict provisions. Failure to follow these provisions could result in estate litigation. If you have questions about whether or not a trustee can engage in decanting and whether their actions were legal, you need to speak with a skilled Pompano Beach estate litigation attorney.
You might be wondering why a trustee would “decant” to a new trust. There are a number of reasons, including the need to correct mistakes, clarify items, convert a trust to a supplemental needs trust, or in order to adapt to conform to changes in the law.
2018 Florida Revisions to the Decanting Statute
Under the 2018 revisions to the decanting statute, trustees can engage in decanting in one of three ways. The first involves the trustee having “absolute power” as noted in the trust instrument. This particular option involves the most flexibility. The second method provides a trustee with certain powers, but not absolute power. For example, a trustee who has distribution power limited by the health, education, maintenance, and support (HEMS) standard may have the ability to have different provisions in the new trust. This is something that should be discussed with a knowledgeable attorney.
Finally, there is a way that a trustee can decant from a trust that isn’t a “supplemental needs trust” to one that would now qualify as a supplemental needs one. There are important limitations you need to know with this option as well.
What happens if the creator of the trust doesn’t want a trustee to have decanting privileges? Then, he or she would need to have the attorney add a section to include a general prohibition that addresses decanting and prevents the trustee from conducting this type of transaction.
Should You Decant?
Remember that although the rules have expanded, the rules for notification are now stricter. There is a requirement to send a 60-day written notice. The applicable statute clearly defines who has to be notified when a trustee intends to decant and what documentation they need to provide. Beneficiaries have the right to object to a trustee’s intent to decant and the 60-day notice doesn’t limit his or her right to raise the objection.
Contact a Pompano Beach Estate Litigation Attorney
If you are challenging a trustee’s intention to decant, you need the assistance of an experienced Pompano Beach estate & trust litigation lawyer. Contact Mark R. Manceri, P.A. today to schedule an initial consultation.