Does Virginia have a decanting statute?
Does Virginia have a decanting statute?
Virginia’s decanting statute, which will be codified at Virginia Code § 55-548.16:1, has an effective date of July 1, 2012. Decanting will be available to any trust administered under Virginia law, regardless of when the trust was created, unless the terms of the trust explicitly prohibit the trustee from decanting.
When can you decant a trust?
Only certain trusts may be decanted. For example, a trust held solely for charitable purposes, such as a private foundation structured as a trust, cannot be decanted. A trust containing a charitable interest, such as a trust with a charity as a remainder beneficiary, can be decanted, however.
How do you decant a trust?
Just like pouring wine from one bottle to another, decanting is relatively straight-forward and consists of these four steps:
- Determine Whether Your State Has a Decanting Statute. Nearly half of US states currently have decanting laws.
- Move the Trust.
- Decant the Trust.
- Transfer the Assets.
- Get the Most from Your Trust.
What does it mean when a trust is decanted?
Decanting trusts – the act of distributing assets from an old trust to a new one with more favorable terms — is a practice that’s catching the attention of estate planners and attorneys. “
Does a decanted trust need a new EIN?
This is administratively simpler—the new trust does not need to obtain a new employee identification number, file two tax returns for one year, or complete Schedules K-1 to transfer tax attributes from the distributing trust to the receiving trust.
Is Virginia a UTC state?
In its 2005 session the Virginia General Assembly enacted Senate Bill No. 891, thus adopting the Uniform Trust Code (UTC), with modifications considered appropriate to this state’s institutions, traditions and jurisprudence.
Can a revocable trust be decanted?
Under California law, a trust can be changed or “decanted” even though it is irrevocable. Decanting can mean moving trust assets into another trust or modifying the original trust. Although some amendments can be made, they must honor the grantor’s original intent when creating the trust.
Is a decanted trust a new trust?
Beyond correcting scrivener’s errors, resolving ambiguities, or clarifying trust language, decanting allows trustees to change some provisions of an irrevocable trust by pouring the assets into a new trust with modified terms. As long as the trustee proceeds with care, trust decanting can be a powerful tool.
Is decanting a trust a taxable event?
Tax Considerations For income tax purposes, IRS has ruled that in general a decanting is not a recognition event with respect to capital gains. If it is a distribution, a decanting from one trust to another would carry net taxable income from the old trust to the new trust.
What is UTC in a trust?
The Uniform Trust Code (UTC) is a comprehensive codification of the common law on trusts.
What is a trust in Virginia?
A living trust in Virginia is an estate planning option that allows you to place your assets in trust while continuing to use and control them. The trust passes the assets to your beneficiaries after your death. A revocable living trust (inter vivos trust) offers unique control and flexibility.
Can you decant an irrevocable trust into a revocable trust?
Fortunately, California recently enacted a law which provides more flexibility when it comes to modifying an irrevocable trust. Under California law, a trust can be changed or “decanted” even though it is irrevocable. Decanting can mean moving trust assets into another trust or modifying the original trust.
