Morris Hall, PLLC

Estate Planning Attorneys

MakePayment with multiple options
CALL NOW: 1 (888) 222-1328
  • Home
  • Our Firm
    • About Morris Hall
    • Attorneys
    • Our Team
    • Morris Hall Core Values
    • Communities We Serve
      • Arizona
        • Carefree
        • Flagstaff
        • Mesa
        • Oro Valley
        • Phoenix
        • Prescott
        • Scottsdale
        • Sedona
        • Tucson
    • Career Opportunities
  • Our Services
    • Asset Protection
    • Probate
    • Tax Planning
    • Trusts
    • Trust Administration
    • Wills
  • Resources
    • Blog
    • Do I Need an Estate Plan?
    • Elder Law Reports
    • Elder Law Resources
      • Phoenix Elder Law
      • Tucson Elder Law
    • Estate Planning Problems
    • FAQs
    • Probate Resources
      • Probate
      • Flagstaff Probate
      • Phoenix Probate
      • Sedona Probate
      • Tucson Probate
    • Published Books
      • Don’t Go Broke in a Nursing home
      • Tax Free Money for Long-Term Care!
    • Recent Law Changes and Improvements Affecting Arizona
      • Update My Living Trust
    • Reports
    • Videos
    • What to Do When Death Occurs
      • What Not To Do When Someone Dies
      • Who To Contact After A Loved Ones Death
  • Reviews
    • Testimonials
    • Review Us
  • Locations
  • Events
    • Seminars / Webinars
    • Past Webinar Recordings
  • Contact
    • Consultation Policy
    • Contact Us
    • Discounts

Can I Decant a Trust in Arizona?

January 19, 2023 by Morris Hall, PLLC

Phoenix trust attorney

You have likely heard that an irrevocable trust cannot be modified or amended. As a starting point, that is true. What happens though if circumstances change, and you want or need to modify or amend an irrevocable trust? Decanting the trust may be an option. A Phoenix trust attorney at Morris Hall PLLC discusses whether you can decant a trust in Arizona.

Trust Basics

A revocable trust can be modified at any time and for any reason if the Settlor (creator of the trust) is living and capable of carrying out the desired modification. An irrevocable trust, however, is intended to be “irrevocable” from its inception, meaning it cannot be revoked and likely has strict limitations on the ability to modify (if it can be modified at all).

Why Might I Want to Modify an Irrevocable Trust?

There are an infinite number of reasons why you might want to modify an irrevocable trust, including changes in tax laws, the value of trust assets, and the life circumstances of the beneficiaries. One common reason, however, is when a spouse is the remainder beneficiary of a revocable trust that became irrevocable following the death of the Settlor. Although the Trustee may have significant discretion regarding distributions to the surviving spouse, the Trustee may decide that current circumstances call for a modification of the original trust. Because the trustee does not have the authority to make those changes, decanting the trust may be the best option. Other specific reasons why you might want to modify an irrevocable trust include things such as:

  • To correct an error in the original trust agreement.
  • Modifying the ages of distributions for the remainder beneficiaries
  • Providing increased asset protection ability to the Trustee.
  • Changing the jurisdiction of the trust for tax purposes.
  • Adding a power of appointment
  • Including or changing the successor Trustee
  • Including provisions for a special needs beneficiary

What Does It Mean to “Decant” a Trust?

Even if you have never heard the term used in reference to a trust agreement, you have likely heard someone refer to a “decanter of wine.” A decanter is the glass bottle into which wine is “decanted.” Decanting wine means to pour the wine from one bottle into another to get rid of any sediment in the original bottle. Decanting a trust can be understood using the same analogy. The desirable parts of one trust are “poured” into another trust, leaving the undesirable parts of the original trust behind. A trust can be decanted in two ways:

  1. By creating a new trust with new terms and distributing the assets of the old trust to the new trust.
  2. By distributing the assets of the old trust to a pre-existing trust with more favorable terms.

How Do I Know If a Trust Can Be Decanted in Arizona?

The legal authority to decant a trust can be provided by the Settlor within the trust terms or may be authorized by state law. About half of the states have laws in place that specifically allow for decanting a trust, including Arizona. In fact, Arizona law gives a Trustee broad authority to decant a trust. In short, a Trustee may decant a trust without prior court approval, so long as the trust was not written to expressly prohibit decanting.

Even if a trust can legally be decanted, there are several reasons why decanting may not be possible, including:

  • If the original trust agreement specifically prohibits decanting.
  • If a beneficiary’s right to distributions is already effective.
  • The Trustee’s authority/discretion is limited by the trust agreement. (Most trusts provide a least some discretion to the Trustee to make distributions for the “health, support, and education of the beneficiaries”). 

Contact a Phoenix Trust Attorney

If you have additional questions or concerns about decanting a trust in Arizona, contact an experienced Phoenix trust attorney at Morris Hall PLLCby calling 888-222-1328 to schedule your appointment today.

  • Author
  • Recent Posts
Morris Hall, PLLC
Morris Hall, PLLC
Morris Hall, PLLC
Latest posts by Morris Hall, PLLC (see all)
  • What Is a Senior Life Settlement? - January 27, 2023
  • Most Used Estate Planning Documents - January 26, 2023
  • How to Help Older Parents from a Distance - January 24, 2023
MH logo

Main Office

7600 N 16th St, Ste 105

Phoenix, AZ 85020

Phone: 602-249-1328

Fax: 602-248-2887

Subscribe to Our Newsletter

For a sample Click Here

Offices

Our law firm proudly serves many areas in Arizona. See all of our locations here.

Our law firm proudly serves the state of Arizona.  See all of our locations here.

Toll Free: 888-222-1328

Mon-Thur: 8:00am – 5:00pm
Fri: 8:00am – 4:00pm

  • Linkedin
  • Twitter
  • Facebook
  • Youtube
  • Instagram

Need an Estate Planning Lawyer in Arizona?

Looking for an estate planning attorney near you? We have office locations in Phoenix, Mesa, Chandler, Scottsdale, West Valley, Carefree, Prescott, Sedona, Flagstaff, Tucson, and Oro Valley in Arizona so please visit us at the location that is closest to you.

  • © 2023 American Academy of Estate Planning Attorneys, Inc All rights reserved.
  • Disclaimer