Trusts are often created with long-term goals in mind, but laws, family circumstances, and financial strategies do not remain static. As we move into 2026, many trustees are revisiting older trust structures to determine whether they still serve the trust’s original purpose. One option that may be available is transferring assets from an existing trust into a new trust, a process commonly referred to as trust decanting.

While not appropriate in every situation, decanting can provide trustees with a way to modernize trust terms and address issues that were not anticipated when the trust was first created.

What Is Trust Decanting?

Trust decanting allows a trustee, under certain circumstances and subject to state law, to distribute assets from an existing trust into a new trust with updated terms. The original trust typically remains intact, but the assets are “poured” into a new structure that better reflects current needs.

Decanting authority is governed by state law and the language of the trust itself, and it must be exercised in accordance with fiduciary duties.

Why Trustees Are Re-Evaluating Trusts in 2026

Several factors are prompting trustees to consider whether decanting may be beneficial:

Changes in Trust Laws
Many states have updated trust statutes over the years, expanding flexibility around administrative provisions, fiduciary powers, and trust governance. Older trusts may not take advantage of these developments.

Evolving Family Dynamics
Beneficiary needs can change over time. Marriage, divorce, disability, or the addition of new generations may create circumstances that the original trust was not designed to address.

Administrative Inefficiencies
Some trusts contain outdated administrative provisions that complicate accounting, distributions, or fiduciary oversight. A new trust can streamline these processes while preserving the trust’s intent.

Modern Asset Structures
Trusts today often hold more complex assets, including closely held businesses, real estate, and alternative investments. Decanting may allow trustees to align trust terms with how assets are currently managed.

Improved Fiduciary and Risk Management
Decanting may allow for clearer trustee powers, updated distribution standards, or enhanced protections for trustees acting in good faith.

Important Considerations Before Decanting

Decanting is not a blanket solution. Trustees must carefully evaluate whether they have the authority to decant and whether doing so aligns with their fiduciary obligations. Factors to consider include:

• State-specific decanting statutes
  
  
• The language and intent of the original trust
  
  
• The interests of current and future beneficiaries
  
  
• Potential tax and reporting implications
  
  

Legal and tax advisors should be consulted before any action is taken.

The Role of a Corporate Trustee in Decanting Decisions

Because decanting involves fiduciary judgment and regulatory considerations, professional trust administration can be especially valuable. Corporate trustees are experienced in evaluating trust terms, coordinating with legal counsel, and ensuring any action taken is properly documented and compliant with applicable law.

As an independent corporate trustee, ITC delivers fiduciary oversight, comprehensive documentation, and long-term continuity as a trust evolves. Thoughtful evaluation and experienced guidance help ensure that any changes remain aligned with the trust’s long-term objectives.