Trust Decanting Agreement

To settle, state law may require the agent to have a very wide margin of appreciation to make distributions of capital (or, in some states, income or capital), such as.B. distributions for the best interest or welfare, or at the sole and absolute discretion of the agent. In some cases, such as Illinois and New York, decantation may be possible, even if the standard is more limited, but changes to the old position of trust that may be allowed may also be more limited. [30] The statute may also require that the agent not be a beneficiary of the deposit of the trust. [31] Most trusts allow the agent to distribute both income and capital to beneficiaries according to a certain standard. However, a considerable number of trusts still provide for a mandatory distribution of net income, but no capital. This may be the case especially in situations of the second marriage. A spouse may want to care for their surviving spouse, but is afraid that the surviving spouse will spend the trust principle (for themselves or even for a future spouse) to the detriment of the children of the deceased spouse from a previous marriage. After the expiry of the notice period (or after a total waiver of such a period), the agent must prepare a signed record of the decantation identifying the first and second trusts and the corresponding trust agreements, identifying the real estate transferred to the second trust and specifying whether the property remains in the first trust29 In the event of a settling that modified the first trust, Instead of establishing a new fiduciary agreement, the signed dataset may be the first fiduciary instrument to contain the amended terms of decantation.30 When deciding whether to exercise a decision-making power, the trustee should keep in mind that he or she is likely to act in trust (unless otherwise provided in the trust instrument). The Illinois Statute provides another means of protection for an agent who is considering entering into an out-of-court agreement.