Trust Decanting Requirements in Alabama
At a glance
| Governing law and available decanting route | Ala. Code ch. 19-3D, §§ 19-3D-1 to -29, Alabama Uniform Trust Decanting Act. Decanting power distributes first-trust property to ≥1 second trusts or modifies first-trust terms; modified first trust is a second trust (§§ 19-3D-1 to -2) |
|---|---|
| First-trust scope, state connection, retroactivity, and opt-out | Express trust irrevocable or revocable only with trustee/adverse-interest holder consent; solely charitable trust excluded. Applies to trusts created before/on/after Jan. 1, 2019 with Alabama principal administration or specified Alabama governing-law connection. Express restriction/prohibition controls and carries forward; general amendment/revocation, spendthrift, or transfer-restraint clause does not (§§ 19-3D-3, -5, -15) |
| Authorized fiduciary and required distribution power | Nonsettlor trustee/other fiduciary with discretion to distribute/direct part/all principal to ≥1 current beneficiaries; court-appointed special fiduciary; or special-needs fiduciary. Disability hierarchy reaches principal discretion, then income discretion, then mandatory income/principal (§§ 19-3D-2(3), -9, -13) |
| Expanded, limited, mandatory, and ascertainable-standard branches | Expanded = discretion not limited by ascertainable/reasonably definite standard; may decant covered principal with vested/beneficiary limits. Limited = discretion limited by either standard; aggregate second-trust interests must be substantially similar. Mandatory authority appears only in disability branch (§§ 19-3D-2(2),(11),(21), -11 to -13) |
| Beneficiary, vested-interest, and power-of-appointment changes | Expanded route generally bars new current/remainder/successor beneficiaries and reduction/elimination of vested interests; may retain/omit/create/modify appointment powers and use broader/different appointee class. Limited route preserves substantially similar interests. Disability route may alter the disabled beneficiary's interest while protecting others in aggregate (§§ 19-3D-11 to -13) |
| Second-trust terms, duration, governing law, and administration | Distribution to ≥1 second trusts or first-trust modification; expanded/ limited second trusts may use any jurisdiction, subject to charitable rule. Duration may differ, but attributable property keeps first-trust maximum- perpetuity, accumulation, and alienation-suspension rules. Complete exercise presumptively carries later property; partial leaves it unless otherwise provided (§§ 19-3D-2(10),(23), -11 to -12, -14(e), -20, -26) |
| Tax, charitable, special-needs, compensation, and other guardrails | Detailed marital/charitable deduction, gift-exclusion, S-corporation, GST, qualified-benefits, foreign-grantor, grantor-status, and other tax-benefit limits. Charitable interests protected and may trigger Attorney General rights/notice. Special-needs/animal routes included. Compensation increase, liability relief/aggregate reduction, and remover-power changes restricted (§§ 19-3D-13 to -19, -23) |
| Notice, recipients, consent, waiver, objection, and representation | Notice in record ≥60 days before exercise to living/existing settlors, first- trust qualified beneficiaries, present appointment-power holders, fiduciary removers, both trusts' fiduciaries, and Attorney General when applicable; representative and unknown/unlocatable rules. Give manner/effective date, first/all second instruments, recipient capacity, and six-month challenge statement. All recipients may waive period in signed record; settlor cannot represent beneficiary (§§ 19-3D-7 to -8) |
| Exercise instrument, court review, effectiveness, and remedies | Signed record identifies first/all second trusts and distributed/remaining property, directly or by notice reference. Consent/court approval ordinarily unnecessary; listed applicants may seek instructions, special fiduciary, approval, ineffectiveness ruling, corrective directions, or relief. Challenge to effectiveness/abuse/breach by notice recipient or beneficiary generally due within six months after notice; reasonable-diligence missed notice does not extend. Reasonable-care notice saving, defect cure, reliance protection, later-property defaults, inherited obligations (§§ 19-3D-6 to -10, -22, -26 to -27) |
Requirements one by one
Covered trust and power tiers
Alabama Code § 19-3D-3 covers an express trust that is irrevocable or revocable only with consent of the trustee or an adverse-interest holder and excludes a solely charitable trust. Section 19-3D-5 reaches trusts created before, on, or after January 1, 2019 when Alabama supplies a listed administration or governing- law connection.
Expanded discretion under § 19-3D-11 permits covered-principal decanting without adding impermissible beneficiary classes or reducing vested interests. Limited discretion under § 19-3D-12 requires the second trusts in aggregate to provide substantially similar beneficial interests. Section 19-3D-13 adds a disability route that can reach income discretion or mandatory income/principal authority.
Notice and the six-month challenge clock
Alabama Code § 19-3D-7 bars exercise before 60 days after record notice to the listed settlors, first-trust qualified beneficiaries, present appointment-power holders, fiduciary removers, fiduciaries of both trusts, and Attorney General when the charitable-interest rule applies. Notice identifies the proposed manner and effective date, includes the first and all second trust instruments, states the recipient's capacity, and warns that an application under § 19-3D-9 must be filed within six months after notice.
Alabama Code § 19-3D-9 applies that six-month limit to a notice recipient's or beneficiary's proceeding to declare the exercise ineffective for noncompliance, abuse, or breach. Failure to receive notice does not extend the deadline if the fiduciary used reasonable diligence to comply.
Alabama Code § 19-3D-8 governs representation, and § 19-3D-6 protects a person who reasonably relies on the validity of a decanting or modification.
Exercise record, court review, and saving
The authorized fiduciary signs a record identifying the first and all second trusts and the property sent to each or left behind. Consent and court approval are ordinarily unnecessary, but eligible applicants may seek instructions, special-fiduciary appointment, approval, an ineffectiveness ruling, corrective directions, or other relief.
Reasonable care to comply prevents a missed notice from automatically making the exercise ineffective. Section 19-3D-22 separately saves an otherwise valid exercise when part of the second-trust instrument does not comply, voiding the forbidden term or supplying the required term to the necessary extent.
What trips people up
The 2021 amendment made the notice itself part of the limitations defense: it must state both the recipient's capacity and the six-month filing deadline. A generic summary of reasons or a statement of a right to object does not replace those two statutory contents.
An express decanting or further-trust restriction controls and carries forward. A general no-amendment, no-revocation, spendthrift, or transfer-restraint clause does not.
Common questions
Can a second trust use another state's law?
Usually yes under the expanded and limited routes. A qualifying determinable charitable interest under § 19-3D-14 can require Alabama administration unless the Attorney General does not object, consents, or a court approves.
Can a second trust last longer?
Its stated duration may differ, but § 19-3D-20 keeps the first trust's maximum- perpetuity, accumulation, and alienation-suspension rules on attributable property.
What happens to property discovered later?
Under § 19-3D-26, a complete decanting presumptively carries later property to the second trust; a partial decanting presumptively leaves it in the first trust, unless the exercise or second-trust terms provide otherwise.
Statutes and sources
- Ala. Code ch. 19-3D, §§ 19-3D-1 to -29 — current Alabama Uniform Trust Decanting Act. Official code portal (accessed September 12, 2026 through the portal's official code endpoint).
Source links
Every statute quoted above, linked, with the date we checked it.
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