One of the estate planning tools that Nevada residents can use to protect certain assets for their heirs is an irrevocable trust. The nature of this particular type of trust prevents its provisions from being modified or cancelled, except in some cases with the expressed agreement of the beneficiaries and after taking expensive legal action. However, with legislation regarding decanting that is being passed in an increasing number of states, altering irrevocable trusts may soon become more common.
Trust decanting involves the trustee of an irrevocable trust transferring the assets of the original trust into another trust that has the desired modified terms. The trustee of the original trust has the authority to create the second trust due to the powers he or she was bestowed under the agreement for the original trust. State-level decanting statutes as well as common law could also grant this power.
There are certain situations in which it is appropriate to decant a trust. This includes circumstances that make the terms unfavorable, such as when the disbursement of payments from a trust would no longer be in the best interests of a beneficiary with personal issues, such as substance abuse. Decanting is also used to separate or combine trusts, rectify errors or areas of vagueness in a trust agreement, create directed trusteeships with business advisors or give beneficiaries the powers of appointment.
An attorney who practices estate planning law can help clients choose the appropriate types of trusts. The attorney’s trust planning services may include the creation of living, charitable, spendthrift, constructive or testamentary trusts.