Decanting to Modify Irrevocable Indiana Trusts
1 CLE - This program has concluded. Please join us next time.
What is trust decanting, and why is it done? Well, if you have ever decanted a vintage wine, you are actually on the right track. The process is to remove undesirable elements from the old vessel (container for wine, irrevocable trust for an estate plan) and preserve the good elements. In the case of a trust, what is filtered out are any outdated or unhelpful provisions.
Join Jeff Dible, Rebecca Geyer, and Bob Adams for this convenient, one-hour live webcast program that will examine the following discussion points.
1. Typical scenarios or situations in which trust decanting is available or considered as a "solution," such as:
• An existing trust give a mandatory income interest to an individual with significant disabilities who would like to apply for and receive public benefits
• An existing trust is going to terminate and the trust's terms require a portion of the trust's assets to be distributed "outright" to an adult individual who is disabled
2. Constraints under our existing statute I.C. 30-4-3-36 which can make trust decanting difficult or "not a solution" when the objective is to modify a trust that has a disabled adult beneficiary:
• Subsections (a) and (c) of our current statute rely on the "exercise of power of appointment" model to describe what happens when a trustee decants
• Subsection (a)(2) of the current statute prohibits the use of decanting to reduce or eliminate an income, annuity, or unitrust interest (only a current interest, or a successor / future income interest?) under the terms of the first/original trust
3. Practical logistics and mechanics of accomplishing decanting when our current Indiana statute can be used:
• Identify the "qualified "beneficiaries" of the first/original trust who will need to receive or waive notice
• Obtain appointment of GAL(s) as needed, or identify "virtual representatives" under I.C. 30-4-6-10.5, for "qualified beneficiaries" who are not adults, unborn or incapacitated, etc.
• Design and draft the terms of the second or receiving trust, including updated/rewritten administrative terms
• Pre-decanting notice to be sent to all qualified beneficiaries or their representatives or GALs
• Use of an optional waiver/consent form to be signed by qualified beneficiaries to shorten or eliminate the 60-day waiting period
• The making of the decanting distribution(s) by the trustee from the first/original trust to the second or receiving trust
Income tax compliance in light of uncertain treatment by the IRS since 2011
4. Ideas for reforming, replacing, or improving Indiana's existing decanting statute
• Borrowing sections and concepts from the Uniform Trust Decanting Act
• Pros and cons of enacting the entire Uniform Act
• Circumventing the shortcomings of Indiana's current statute by including specific decanting provisions in newly-designed irrevocable trusts
Also to be covered will be the background of decanting and the 1995 GST regulations, as well what the notice looks like.
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Faculty:
Jeffrey S. Dible
Frost Brown Todd LLC, Indianapolis
Rebecca W. Geyer
Rebecca W. Geyer & Associates, PC, Carmel
Robert Adams
Adams & Cramer, Shelbyville
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Decanting to Modify Irrevocable Indiana Trusts
1 CLE - This program has concluded. Please join us next time.
ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN • Premier Indiana CLE
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