DanyiLaw Fun Word of the Day: "Decanting".

Decanting a trust has nothing to with wine, unless you have a oenophile fiduciary, but it's a great visual to understand the concept. When you decant wine, you pour out the good stuff and leave the sediment behind. When you decant a trust, you pour the money out into a new trust and leave the old trust, with whatever unworkable language it has, behind.

Decanting has lots of rules, however, and has not been statutorily authorized yet in Pennsylvania, although it has been in 26 other states. Pennsylvania's Uniform Trust Act contains certain provisions for modification of existing trusts, usually when the beneficiaries and the trustee are in agreement that something be changed. A court can also modify trusts, although doing it privately is preferable to most people.

For example, many irrevocable life insurance trusts (ILITs) were created in the 1990s for legitimate tax reasons. Those reasons are, for most people, no longer an issue in 2016. Many ILITs have been modified or even terminated by consent of all concerned, even though an ILIT is, by definition, irrevocable.

A decanting statute would go beyond modification to permit a completely new trust to take over the assets from the old trust.