What does a trustee do when an irrevocable trust needs to be modified?  Circumstances or laws may have changed in ways that could not have been anticipated at the time the trust was drafted.  In the past, a trustee who wanted to change some aspect of an irrevocable trust had few options, other than a court order to reform the trust which can be a costly and lengthy process.  Now, many states have alleviated the necessity of court approval to modify trusts by permitting “decanting.”

Decanting is the term generally used to describe the distribution of trust property to another trust pursuant to the trustee’s discretionary authority to make distributions to, or for the benefit of, one or more beneficiaries.  Decanting may be permitted by statute, by the terms of the original trust or by court-created law.  Currently, Massachusetts has

Settlement regret.

A lot of litigants end up getting it, especially in such emotionally-charged litigation as probate litigation.  Most of the time those litigants just end up expressing those feelings of regret to their lawyers.  Sometimes they try to take it further.  How can the regretful party’s lawyer see it coming and how can that lawyer guard against it?

A New Jersey trial court in In the Matter of the Estate of Lillian A. Hogan (not for publication) provides some clues. 

Most grantors understand that their trustee shouldn’t have a court looking over its shoulder every time it exercises a discretionary power.  That’s why trustees are granted discretionary powers.

Despite a grantor’s broad grant of authority to a trustee, however, trustees often find themselves embroiled in litigation over the exercise of a discretionary power, particularly with respect to discretionary distributions.

In Thompson v. Anthony (unpublished), in the context of an unjust enrichment claim, the Appeals Court of Massachusetts considered the implication of a trust provision giving the trustees “absolute discretion” over distributions.