Trust Decanting: A Critical Perspective

The article critically examines the legal and policy implications of decanting, a process allowing trustees to transfer assets into a new trust with modified terms. It argues that while decanting offers flexibility and efficiency in trust administration, its potential for tax avoidance and imposition of external costs on creditors and the public fisc raises significant concerns. The analysis questions whether decanting aligns with the principles of testamentary freedom and the settlor's intent, while also highlighting the need for a balanced approach to mitigate its negative consequences.