Bill > HB1749

This bill adopts the Uniform Trust Decanting Act, which provides a comprehensive legal framework for how trustees can modify existing trusts by "decanting" (transferring) trust assets to a new trust with potentially different terms. The bill establishes detailed definitions and procedures for how authorized fiduciaries can exercise a "decanting power" to redistribute trust assets to a new trust, with several important limitations and protections. Key provisions include requiring notice to beneficiaries before exercising the decanting power, protecting the interests of existing beneficiaries, maintaining similar beneficial interests in the new trust, and preserving tax benefits of the original trust. The act includes special provisions for trusts with charitable interests, trusts for beneficiaries with disabilities, and trusts for animal care. The bill also establishes tax-related limitations to ensure that decanting does not inadvertently compromise existing tax strategies or benefits. Notably, the act does not create a mandatory duty for trustees to use decanting, but provides a structured legal mechanism for trustees to modify trusts when appropriate, with safeguards to protect beneficiaries' interests. The bill will take effect on January 1, 2026, giving trusts and trustees time to understand and prepare for the new law.