Decanting — a valuable tool available to Nevada trusts
Should the terms of your irrevocable trust no longer serve your family's needs, Nevada's exceptional decanting statutes offer a practical, court-free path to update them — for trusts that qualify.
The history behind "decanting": traditionally, once a grantor established and funded an irrevocable trust, its terms were fixed forever. In 2009, Nevada recognized that a trust could outlive its usefulness even as the family's circumstances evolved, and enacted a statute allowing trustees to modernize a trust's terms without returning to court. Nevada's decanting statute has since become one of the most flexible in the country.
How does a "decanting" work?
A trustee with discretion or authority to distribute income or principal transfers the assets of the original irrevocable trust into a new irrevocable trust with terms updated to fit the family's current needs. It's often compared to decanting fine wine — a trustee pours the trust's assets into a new vessel, leaving outdated or unworkable terms behind. Because Nevada does not require court approval or beneficiary notice to decant, the process can be efficient and private — though a trustee always retains the option to provide notice or seek court approval where circumstances call for it.
Not every irrevocable trust qualifies. Nevada's statute applies where the trustee already holds discretionary authority over income or principal distributions. Trusts with only fixed, mandatory distribution terms generally aren't eligible for decanting — though other tools, such as a nonjudicial settlement agreement or a trust modification, may still be available. Our team can help determine which path fits your trust.
Why families consider decanting
- Updating outdated, unclear, or unworkable trust terms.
- Appointing or replacing a trustee, or adding a trust protector.
- Modifying the trust's tax status.
- Changing the trust's governing jurisdiction and situs.
- Splitting one trust into multiple trusts for different beneficiaries.
- Converting to a Special Needs Trust for a qualifying beneficiary.
What decanting can change
- Trustee powers and administrative provisions.
- Distribution standards and beneficiary terms (within statutory limits — a beneficiary's existing fixed income, annuity, or unitrust interest cannot be reduced, and new beneficiaries generally cannot be added).
- The trust's governing law and situs — including migrating to Nevada.
- In some cases, a trust's duration, where situs in Nevada allows access to its 365-year rule against perpetuities. Because the applicable perpetuities period generally traces back to when the original trust was funded, Crawford Trust in tandem with your counsel can confirm what's achievable for your specific trust.
Three steps involved in decanting
Step 1
Migrate your trust to Nevada
If your trust isn't already governed by Nevada law, it will typically need to be migrated here first. Nevada allows an irrevocable trust to migrate from virtually any other jurisdiction, and its nexus requirements are among the most flexible in the country.
Step 2
Establish a new irrevocable trust in Nevada
The new trust can be created by a trustee or the grantor, must meet Nevada's statutory requirements, and may include terms that differ meaningfully from those of the original trust — within the statute's limits.
Step 3
Execute the decanting declaration
Assets from the original trust are titled to the new Nevada trust, new trust roles are documented, and the updated terms are declared. Nevada law does not require notice to beneficiaries, but a trustee may choose to provide notice or seek court approval where appropriate. Professional legal counsel should be involved throughout the process.
Is your trust a candidate for decanting?
Crawford Trust will work alongside your legal and tax advisors to determine whether decanting — or another Nevada trust administration tool — is the right fit for your family. In consulting with our experts, you will enjoy a Nevada-based corporate fiduciary experienced with the decanting trust process, working alongside your existing attorneys, CPAs, and financial advisors to carry out your new estate goals precisely as your trust document provides.
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Other ways we serve families like yours.
Directed Trustee Services
Continue the relationships with the financial advisors you have appointed. Nevada's directed-trusts statutes let families share investment, distribution, and administration roles.
Successor Trustee Services
Trust administration needs can change. Crawford Trust can assist in your successor trustee circumstances.
Private Trust Company Services
When assets demand more privacy, Crawford Trust can help family offices identify and provide roles into an independent private trust company structure.
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