Fortunately, according to an article on FinancialPlanning.com, many states have been updating their trust laws in recent years, providing new and simplified techniques to help trustees deal with the challenges of administering irrevocable trusts.
In the article New Ways to Change ‘Irrevocable’ Trusts, author Tracy Craig discusses the two primary methods, “non-judicial settlement agreements” and “decanting,” that can now help advisors solve many of the problems that arise with irrevocable trusts over time.
For details, read the FinancialPlanning.com article: New Ways to Change ‘Irrevocable’ Trusts by Tracy Craig.
- Both non-judicial settlement agreements and decanting introduce new flexibility into the administration of irrevocable trusts, but that each method should be used carefully.
- The IRS has not issued any guidance on the tax ramifications of either technique. Therefore, it would be wise to carefully consider whether any adverse tax effects could be caused when fixing other existing issues.
- While not every state currently allows these options, an increasing number do.