By Alexander LeVeque
As a trust and estate litigator in Nevada, I routinely see the complexities surrounding irrevocable trusts. While these instruments are designed to provide certainty, tax efficiency, and asset protection, they’re not always as “irrevocable” as the name suggests. Life changes, tax laws evolve, and family dynamics shift—often requiring trustees and beneficiaries to consider amending or decanting the trust. But just because they can doesn’t always mean they should.
This article offers a practical roadmap for navigating these decisions, with a particular focus on balancing legal options with fiduciary responsibilities.
Why amend or decant?
There are many legitimate reasons for amending or decanting an irrevocable trust. Some of the most common include:
- Fixing drafting errors, such as misidentifying beneficiaries or property.
- Eliminating outdated provisions, like references to the Rule Against Perpetuities in dynasty-trust-friendly jurisdictions.
- Adapting to tax law changes, including restructuring formulas tied to outdated exemption amounts.
- Changing trust situs for more favorable jurisdictional treatment.
- Providing for special needs beneficiaries or enhancing asset protection by shifting to a fully discretionary standard.
Decanting is especially powerful—it allows a trustee to transfer trust assets into a new trust with more favorable terms, much like pouring wine to separate out the sediment. However, both amending and decanting actions must align with applicable state law and, crucially, fiduciary duties.
Applicable laws: What does the trust say?
The first step is always to read the trust document itself. Does it contain express language allowing or prohibiting amendment or decanting? What is the trustee’s distribution standard? Does the trust confer limited or expansive discretion?
State law governs the amendment or decanting of trusts, and rules vary widely. Nevada, for example, permits broad decanting powers under NRS 163.556. The Uniform Trust Code (UTC) and Uniform Trust Decanting Act (UTDA) provide more narrow model frameworks, adopted in varying forms across states.
Can ≠ should: fiduciary duties still apply
Even when authorized, the trustee must tread carefully. Nevada law, which generally tracks the Restatement (Third) of Trusts, outlines four critical fiduciary duties:
- Duty of Loyalty: Act solely in the interest of the beneficiaries.
- Duty of Impartiality: Consider the diverse interests of all beneficiaries, whether vested or contingent.
- Duty of Prudence: Exercise skill, care, and caution appropriate to the role.
- Duty of Good Faith: Act in line with the trust’s purpose and applicable law.
Non-judicial options
- When court involvement isn’t preferred, trustees have non-judicial tools:
- Non-Judicial Settlement Agreements (NJSAs) allow beneficiaries and trustees to agree on changes, provided they don’t violate the trust’s material purpose. While private and cost-effective, NJSAs are not binding on non-parties and may carry tax or enforceability risks.
- Notices of Proposed Action (NOPAs) provide transparency and offer beneficiaries a chance to object before a trustee takes a proposed action. In jurisdictions like Nevada, proper notice can cut off future liability—but may also provoke litigation if objections arise.
Judicial pathways
Sometimes, court intervention is the wisest route:
- Petitions for instructions let trustees seek guidance before acting, creating a “safe harbor” from liability. Courts in Nevada have broad powers to approve actions and bind all interested parties.
- Petitions for ratification ask courts to validate actions already taken. While not ideal, this approach can still shield trustees if the court approves the conduct retroactively.
- Combination approaches—like pairing a NJSA with a petition—offer both flexibility and legal certainty. This “belt and suspenders” method can be the best practice in complex or high-risk scenarios.
Lessons from case law
Recent cases underscore the stakes. In Hodges v. Johnson, 177 A.3d (N.H. 2017), trustees decanted two trusts to eliminate certain beneficiaries. The court voided the decantings and removed the trustees for breaching the duty of impartiality, affirming that even contingent beneficiaries deserve consideration. Similarly, In Re: Matter of Niki and Darren Irrevocable Trust, 2024 WL 3515556 (Del. Ch. 2024), Delaware’s Chancery Court invalidated a decanting where the trustee lacked power to invade the principal.
These cases reinforce a simple truth: trustees must understand their powers and duties before acting—or risk costly consequences.
Final thoughts
Amending or decanting an irrevocable trust can be a powerful tool to achieve better outcomes for all involved. But like any powerful tool, it must be used with care. Trustees must not only follow the letter of the law, but also the spirit of their fiduciary obligations. When in doubt, it’s always wise to seek judicial guidance or pair non-judicial actions with court approval.
About the author
Alex LeVeque is the Managing Partner of Solomon Dwiggins Freer & Steadman, Ltd., where his practice is devoted to private wealth law, with an emphasis on fiduciary and trust litigation. He represents clients across Nevada, throughout the United States, and internationally in complex trust and estate disputes.
About the article
This article was originally published in the Communiqué (May 2025), the official publication of the Clark County Bar Association. See https://clarkcountybar.org/about/member-benefits/communique-2025/communique-may-2025/. The printed magazine was mailed to CCBA members on April 30, 2025.
The articles and advertisements appearing in Communiqué magazine do not necessarily reflect the opinion of the CCBA, the CCBA Publications Committee, the editorial board, or the other authors. All legal and other issues discussed are not for the purpose of answering specific legal questions. Attorneys and others are strongly advised to independently research all issues.
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