Massachusetts Has No Decanting Statute
Sometimes you can, but Massachusetts has not followed the many other states that have enacted trust decanting statutes. That is an important distinction if you have been reading online about how easily an irrevocable trust can be changed. Massachusetts has not adopted the Uniform Trust Decanting Act, although legislation has been proposed, most recently House Bill 4330, which remains in committee. Here, the authority to decant depends on the trust document and Massachusetts case law, rather than a decanting statute that supplies a framework for the transaction.
What Decanting Actually Means
Decanting generally means moving assets from an existing trust into another trust with different terms. The name comes from pouring wine from one container into another. With a trust, the idea is that the assets continue to be held in trust, but provisions governing their administration or distribution may change. That can be useful when an older trust no longer works well for the family. It does not mean the person who created the trust can simply decide to take everything back or write a replacement.
Why Another State’s Rules Do Not Answer It
In states with decanting statutes, the law generally addresses when and how a trustee may exercise that authority, subject to requirements and limitations. Massachusetts takes a different route. We need to examine the powers granted to the trustee and determine whether those powers support the proposed transfer under the court decisions. Advice about a trust governed by another state’s law may sound promising, but it does not establish what can be done with your Massachusetts trust.
What the Supreme Judicial Court Has Said
Two important Massachusetts decisions are Morse v. Kraft and Ferri v. Powell-Ferri. In those cases, the Supreme Judicial Court recognized decanting authority based on the language and circumstances of the trusts before it. Broad discretionary powers were central to the analysis. The lesson is not that every irrevocable trust can be decanted, but that the authority may exist even without a Massachusetts decanting statute. We still have to read your document and evaluate the particular change you want to make.
Why Families Ask About It
There are practical reasons to explore it. Perhaps a trust will continue for decades but has an inadequate process for replacing a trustee. Perhaps provisions written when the beneficiaries were young no longer fit their circumstances. A family may also want to examine whether an inheritance can remain protected in trust instead of being distributed at a particularly difficult time. Those concerns give us a reason to review the document. They do not, by themselves, give the trustee permission to make the change.
Existing Beneficiary Rights Come First
Existing beneficiary rights need careful attention. A required distribution, a withdrawal right, or another enforceable interest can make the analysis more complicated. The trustee also has duties to the beneficiaries and must act consistently with the trust’s purposes. Decanting cannot be treated as an opportunity to reward the cooperative child or punish the difficult one. Whether notice, consent, or court involvement is appropriate needs to be evaluated for the actual transaction, rather than assumed from something that worked for another family.
What the Change Could Do to the Rest of the Plan
We also need to consider what the change would do to the planning already in place. A trust may have been designed around estate taxes, public benefits, creditor protection, or several goals at once. Changing its terms can affect those results. If the trust was created for MassHealth or special needs planning, for example, we would want to understand the eligibility consequences, including how the five-year look-back applies, before moving assets or changing anyone’s rights. Fixing an inconvenient provision is not much of an improvement if the fix undermines the reason the trust exists.
What We Need in Order to Answer It
The starting point is the complete trust, any amendments, a picture of the assets, and a clear explanation of what is no longer working. From there, we can determine whether decanting is available or whether another approach, such as a permitted modification or court proceeding, makes more sense. Massachusetts has not supplied the statutory route available in many other states, but that does not necessarily leave your family without options. It means the answer has to come from a careful review of your trust.
Start with a free 15-minute consult call with Nicole Ott, our Lead Intake Coordinator. Tell her when the trust was signed and what is no longer working. That is usually enough for us to say whether a review is worth your time.
