What Does It Mean to “Decant” a Trust in Florida?

In common parlance, “decanting” is the process of pouring liquid from one container to another. In the legal and financial domains, this phrase has a distinct meaning. One might “decant” a trust in Florida in order to achieve certain estate planning goals. What does this process entail? Why exactly would someone want to decant a trust in St. Petersburg? These are questions you may want to explore with an estate planning lawyer.

How Trust Decanting Works in Florida

The Florida Bar notes that the decanting process allows people to make changes to irrevocable trusts despite their irrevocable nature. Trust decanting is not necessary for revocable trusts because grantors can simply amend or revoke them instead.

A trustee has the authority to decant a trust in the same way they have the authority to distribute its assets. During this process, the trustee “pours” the trust’s assets into a different trust. This new trust may have different rules compared to the original trust, although changes are limited by the trustee’s powers. If the trustee has “absolute power,” they may create new rules for the trust.

When Is Decanting Necessary?

The Florida Bar provides numerous examples of trusts that may benefit from decanting. In one potential scenario, a beneficiary might represent a threat to the trust’s assets. For example, they might have a gambling addiction. Perhaps they simply have a habit of making extremely poor investment decisions. A beneficiary’s ex might try to access the trust assets during a divorce, and their creditors might do the same.

In these situations, decanting the trust allows the trustee to give the assets new protections against these potential threats. For example, they might introduce new spendthrift provisions after decanting the assets into a new trust.

A beneficiary might also develop a disability or some other kind of health issue, creating the need for a “special needs trust.” In this situation, a trustee might decide to decant the assets into a new “special needs trust” with distinct protections and benefits for that specific beneficiary.

What if the Trustee Abuses Their Power While Decanting?

A trustee has considerable power when decanting a trust, especially if they have absolute discretion to make changes. Florida enforces strict legal safeguards to prevent trustees from abusing their power in this situation. Remember, trustees are always legally bound by their fiduciary duties toward the beneficiaries.

There are strict laws against self-dealing, adding new beneficiaries, and other overreaches of power. If you suspect that a trustee might be abusing their power while decanting a trust, consider raising these suspicions during a consultation with an experienced estate planning attorney.

Can an Estate Planning Lawyer in St. Petersburg Help Me?

An estate planning lawyer in St. Petersburg may be able to help if you need to explore the concept of trust decanting in more detail. While decanting is a strategy people often utilize to fix mistakes, it also allows estate planners, trustees, and other interested parties to evolve with changing circumstances. Learn more by contacting Drude Tomori Law at 727-300-8900. We serve residents of St. Petersburg, Lakewood Ranch, and Sarasota.

Source:

floridabar.org/the-florida-bar-journal/new-opportunities-to-decant-in-florida-part-irecent-changes-to-the-trust-decanting-statute/