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Trust Expert Witness Tucker Cheadle Discusses How Trust Termination and Trust Decanting Can Solve Many Problems

Here we will review what trust termination and trust decanting are and how they can be used to solve many problems that can surface. Trust termination refers to the process of ending a trust, which typically involves distributing the assets held in the trust to the beneficiaries. The benefits of trust termination and have allowed trusts to be terminated when it is in the best interest of the beneficiaries or when the purpose of the trust has been achieved. Additionally, trust termination in California may be advisable in order to solve problems with the administration of the trust if the trust is no longer serving its intended purpose (such as protecting the trust assets from creditors or lawsuits), if the trust is causing conflicts among the beneficiaries, or the trust's assets are being mismanaged.

Probate Code Section 15403 states that "If a trust has become unlawful, impracticable, impossible to achieve, or wasteful, the court may modify or terminate the trust."

Additionally, in the case of Estate of Strang (1940) 16 Cal. 2d 466, 471, the court held that "where the trust has become illegal or impossible of accomplishment, or where it is apparent that the purposes of the trust can no longer be carried out, the court has the power to terminate the trust."

Both of these examples and many others demonstrate that California law allows for trusts to be terminated when problems arise.

Another option is to employ the use of Trust Decanting
Trust decanting is the process of transferring assets from an existing trust to a new trust with different terms or objectives. The benefits of trust decanting include:
  • Modifying trust terms: Trust decanting allows the terms of the original trust to be modified in order to better align with the grantor's current wishes or changing circumstances.

  • Improving tax efficiency: Decanting can also help to improve tax efficiency by allowing the grantor to take advantage of tax laws that have changed since the original trust was created.

  • Protecting assets: Trust decanting can be used to seek to maximize protection of assets from creditors or to reduce estate taxes.

  • Providing powers: Powers to appoint or direct property can be added which take into account changed circumstances.

  • Avoiding probate: Trust decanting can also be used to avoid probate, as assets in a trust are not subject to probate court.

  • Simplifying administration: Trust decanting can simplify trust administration by streamlining the terms of the trust and reducing the number of trusts that need to be managed.
It's worth noting that terminating a trust and trust decanting are complex processes and it's advisable to consult with a trust and wills attorney who is familiar with trust law to determine the best course of action for your particular situation.

Tucker Cheadle is a licensed private trustee in California. He has acted as a fiduciary, trustee, executor, and administrator on more than 70 trusts and wills. Cheadle Law continues working with clients year after year because of the skill and expert handling of all trust matters including trust termination and trust decanting.

Contact Cheadle Law today to discuss a trust termination for your trust and the benefits the experience of Cheadle Law provides at 949.553.1066.

C. Tucker Cheadle Law has been designated as an Expert Witness 40+ times throughout California in these counties: Orange, Los Angeles, San Bernardino, Riverside, San Diego, San Francisco, Marin, Santa Clara, Santa Maria, Stanislas, Yolo, Redding, Napa, San Jose, Santa Barbara, Tucker, San Luis Obispo, and Amador.

In addition, C. Tucker Cheadle Law has been designnated as an Expert Witness in states outside of California including Michigan and Washington, and is available in all 50 states. Contact us today at 949.553.1066 to discuss Trust and Estate Planning Expert Witness needs.

A review of any materials on this web page, any preliminary comments or an introductory meeting does not constitute legal, income tax or accounting advice upon which reliance can be placed. The attorney client relationship can only be created by a written retainer agreement following a check of potential and actual conflicts of interest with other clients.
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Trust Expert Witness Discusses Trust Termination and Trust Decanting

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