Reprinted with permission from Probate & Property, September/October 2018 (32:5), at 28-30. ©2018 by the American Bar Association. Reprinted with permission. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
This is the second and final excerpt from this article that will appear in GPSolo eReport.
With nearly half of the states not having decanting statutes, the question arises as to whether there is a common law right for a trustee to exercise the power of decanting in those states. The Restatement (Second) of Property: Donative Transfers (the “Second Restatement”) and the Restatement (Third) of Property: Wills & Other Donative Transfers (the “Third Restatement”) lend support for the concept of decanting. There is also case law in certain states specifically recognizing the power, including Florida and Massachusetts. The Florida and Massachusetts decisions viewed the power of a trustee to appoint in trust as a special power of appointment, which, by extension, absent a contrary intent by the grantor, translates into a power to decant within the original trust instrument. While decanting may be allowed under common law in some states, like Massachusetts, unless the state has enacted a detailed statute, like the state of New York discussed above, the trustee will lack clear guidance as to the scope of the power, including any procedure for exercising the power, which may cause the trustee to seek guidance from the court (as was the case in the Florida and Massachusetts decisions). This section of the article will examine the Second and Third Restatements and case law decided in Florida and Massachusetts.