Tax Considerations in Trust Terminations, Modifications, and Decanting: Federal and State Taxes, Planning Strategies

Note: CPE credit is not offered on this program

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, November 2, 2021

Recorded event now available

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This CLE webinar will provide estate planning counsel with an in-depth analysis of the tax implications for trust terminations, modifications, and decanting. The panel will describe the various trust modification methods, address federal and state law issues, and offer planning strategies under current tax law for trusts.


Trusts and estates counsel often encounter circumstances where a previously drafted irrevocable trust is defective in some key aspect and requires modification. This defect may be due to a change in circumstances, an error in drafting, or a reaction to legislative changes impacting the tax treatment of trust income.

There are several ways to fix an irrevocable trust. Decanting is only one option among many that may be used to correct a trust. Estate planning counsel must recognize which techniques may apply to a particular set of facts and then implement those techniques.

Several states have seen significant developments in the law governing irrevocable trusts. Counsel must analyze the applicability of state law and consider changing a trust's situs to a jurisdiction with more advantageous laws. In addition, estate planners must recognize the income, gift, and estate tax ramifications of modifying or terminating a trust.

Listen as our experienced panel reviews the key tools available to modify a trust and prepares estate planning counsel for determining state law applicability, notice and consent requirements, and tax considerations.



  1. Modification methods
    1. Judicial and non-judicial reformation
    2. Division
    3. Amendment
    4. Decanting
    5. Other options
  2. Identifying governing law
  3. Tax issues


The panel will review these and other key issues:

  • What methods are available to modify an irrevocable trust?
  • How will the governing state law apply to the validity, construction, or administration of the trust?
  • Who must be notified and give consent before a trust can be modified?
  • What are the tax implications of decanting, terminating, or modifying a trust?
  • What income, gift, and estate tax issues should counsel consider when modifying an irrevocable trust?
  • What is the impact of the generation-skipping transfer rules when modifying an irrevocable trust?


Lipoff, Lawrence
Lawrence M. Lipoff, CPA, TEP, CEBS


With more than 30 years of experience, Mr. Lipoff specializes in the delivery of domestic and international private...  |  Read More

Raatz, Les
Les Raatz

Dickinson Wright

Mr. Raatz practices primarily in the areas of estate planning, probate and trust administration, divorce tax and asset...  |  Read More

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