Morse v. Kraft Authorizes Decanting in Massachusetts

Decanting is the process ofdistributing trust property to another trust pursuant to a trustee’sdiscretionary authority.

In Morse v. Kraft, the Massachusetts Supreme Court recently authorizedthe practice of decanting without the consent or approval of a court orbeneficiary.  This case involved a 1982Trust created by Robert and Myra Craft and four separate subtrusts benefittingtheir four sons.  In 2012, the soletrustee, Richard Morse, was nearing retirement and wished to transfer the subtrustproperty into new subtrusts allowing for the sons to manage the assets of thesubtrusts.

The court decided to followthe terms of the trust agreement. Because the trust granted Morse unlimiteddiscretion in making outright distributions to beneficiaries, it also allowedhim to make outright distributions in further trusts. This broad grant of unlimited discretion evidenced the settlor’s intentto give the trustee authority to decant without beneficiary consent, courtapproval, or authorization by statutory law.

SeeWilliam Linkous & Tiffany McKenzie, MassachusettsSupreme Court Approves Decanting in Kraft Family Trust, Bryan CaveFiduciary Litigation, Aug. 19, 2013.