Understanding Colorado's Trust Decanting Statute
dan • February 10, 2023
Trust decanting is a powerful tool for estate planners and beneficiaries alike. It allows the creator of a trust (also known as the "grantor," the "settlor," the "trustor," or the "trustmaker") to modify the terms of the trust in order to better align with his or her goals and the needs of the beneficiaries. With the passage of Colorado's trust decanting statute in 2016, decanting is more accessible and flexible than ever before.
What is Trust Decanting?
Trust decanting is the process of pouring the assets of an old trust into a new trust. The new trust may have different terms, a different trustee, or a different distribution schedule than the old trust. This allows the grantor to make changes to the trust that better reflect their goals, the needs of the beneficiaries, or changes in the law.
The Benefits of Trust Decanting
Trust decanting offers several benefits to estate planners and beneficiaries. First, it allows the grantor to modify the terms of the trust to better align with their goals and the needs of the beneficiaries. For example, the grantor may want to change the age at which a beneficiary begins receiving distributions or change the distribution schedule to better suit the beneficiary's needs.
Second, decanting allows the grantor to take advantage of changes in the law. For example, if a new tax law is passed that would increase the tax liability of the trust, the grantor may decant the trust into a new trust that is structured to minimize the tax liability.
Finally, decanting can be used to correct errors or omissions in the original trust. For example, if the grantor forgot to include a provision for a beneficiary, the grantor can decant the trust into a new trust that includes that provision.
Second, decanting allows the grantor to take advantage of changes in the law. For example, if a new tax law is passed that would increase the tax liability of the trust, the grantor may decant the trust into a new trust that is structured to minimize the tax liability.
Finally, decanting can be used to correct errors or omissions in the original trust. For example, if the grantor forgot to include a provision for a beneficiary, the grantor can decant the trust into a new trust that includes that provision.
Colorado's Trust Decanting Statute
Colorado's trust decanting statute, found in
C.R.S. § 15-16-901
et seq
.
, provides a flexible and streamlined process for decanting trusts in Colorado. The statute allows the grantor or the trustee to decant a trust, provided that the new trust complies with the requirements of the statute.
One of the key features of the new statute is that it allows the grantor or trustee to decant a trust without court approval. This eliminates the time and expense associated with obtaining court approval and allows the grantor or trustee to decant the trust more quickly and efficiently.
In addition, the new statute allows the grantor or trustee to decant a trust even if the original trust prohibits decanting. This provides greater flexibility to the grantor and the trustee and allows them to make changes to the trust even if the original trust was written in a way that does not allow for changes.
One of the key features of the new statute is that it allows the grantor or trustee to decant a trust without court approval. This eliminates the time and expense associated with obtaining court approval and allows the grantor or trustee to decant the trust more quickly and efficiently.
In addition, the new statute allows the grantor or trustee to decant a trust even if the original trust prohibits decanting. This provides greater flexibility to the grantor and the trustee and allows them to make changes to the trust even if the original trust was written in a way that does not allow for changes.
How to Decant a Trust Under the Statute
To decant a trust under the statute, the grantor or trustee must follow the following steps:
It is important to note that the grantor or trustee must ensure that the new trust complies with the requirements of the statute and that the decanting does not violate any other laws or the terms of the original trust.
- Determine whether the original trust can be decanted.
- Prepare a new trust agreement that complies with the requirements of the statute.
- Transfer the assets from the old trust to the new trust.
- Notify the beneficiaries of the decanting.
It is important to note that the grantor or trustee must ensure that the new trust complies with the requirements of the statute and that the decanting does not violate any other laws or the terms of the original trust.
Conclusion
Colorado's trust decanting statute provides a flexible and streamlined process for decanting trusts in Colorado. It allows the grantor or trustee to decant a trust without court approval and provides greater flexibility to make changes to the trust. If you are considering decanting a trust, it is worth a close look.
What next?
If you think it might be time to think through your estate plan, you can:

- Give us a call at 720-821-7604 to schedule a "Discovery Session" at which we can determine whether our firm would be a good fit for your needs. Or fill out our contact form to have us call you.
- Visit our estate planning page to learn more about how proactively thinking through your estate plan can protect you and your family, minimize hassle, lower the chance of family discord, and minimize or eliminate taxes.
- Learn more by reading our blog or watching our videos .
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