Trust Decanting Requirements in Arkansas

At a glance

Requirements one by one

Two routes remain in the statutes

Chapter 78 took effect January 1, 2026, but Act 680 did not repeal the earlier § 28-73-818 route. Chapter 78 also says it does not limit authority under other state law. The two provisions therefore must be read separately rather than assigning one an unstated universal priority.

The Uniform Act authorizes distribution to one or more second trusts or modification of the first trust. Section 28-73-818 instead authorizes appointment from a testamentary instrument or irrevocable trust to an irrevocable second trust; it calls the appointment an administrative act and permits the modified original trust to serve as the second trust without a physical distribution.

Uniform Act tracks and process

Under § 28-78-111, expanded discretion permits partial or full principal exercise, protects vested interests, restricts new beneficiary groups, and allows specified appointment-power changes. Section 28-78-112 uses a substantially-similar-interests rule for limited discretion. Section 28-78-113 adds a disability route that can step down from principal discretion to income and then mandatory authority.

Section 28-78-107 requires notice in a record no later than sixty days before exercise to the living/existing settlor, first-trust qualified beneficiaries, present appointment-power holders, remover/replacers, both trusts' fiduciaries, and the Attorney General when applicable. The notice describes the exercise and date and includes the first and every second-trust instrument. All recipients may waive the period in signed records. Section 28-78-110 then requires a signed exercise record identifying both trusts and allocated and remaining property. Under § 28-78-109, specified persons may seek instructions, approval, appointment of a special fiduciary, ineffectiveness review, or other relief. Under § 28-78-114, the Attorney General represents a determinable charitable interest and charitable interests cannot be diminished or altered in the listed ways. Under § 28-78-123, an animal trust may be decanted with protector consent while preserving the trust property's intended purpose for the protected period.

The earlier route differs

Section 28-73-818 permits a trustee with instrument-based income or principal authority to appoint property, including while acting at another party's direction or with consent. It limits second-trust beneficiaries to qualifying original-trust beneficiaries, preserves listed income, withdrawal, and vesting interests, restricts trustee-beneficiaries and removable trustees, and allows special-needs, pooled, and third-party second trusts.

Its notice and court routes are optional. If either is used, the notice or petition must state the trustee's view of the effect on compensation and other trust expenses. The actual exercise uses a signed document filed with trust records; acknowledgment is not stated.

What trips people up

The enrolled Uniform Act contains literal textual anomalies. Section 28-78-104 says “duty to chapter,” the trust-limitation heading prints “27-78-115,” the court section cross-references “§ 28-778-118,” and the tax section prints both “January 1, 20205” and “§ 23-78-122.” Those words and numbers should not be silently rewritten or treated as alternate enacted section numbers.

The earlier route does not carry Chapter 78's mandatory sixty-day notice merely because both concern decanting. Section 28-73-818(h) makes notice or court approval optional and states only the required compensation/expense-effect content if one is chosen.

Common questions

Must principal already be distributable under the Uniform Act?

No. Section 28-78-121 says the fiduciary may exercise even if the first trust's standard would not then have produced or compelled a principal distribution.

What happens to a noncompliant second-trust term under Chapter 78?

Section 28-78-122 keeps an otherwise-effective exercise effective, voids an impermissible term to the extent necessary, and deems a required term included.

Does either route create a duty to decant?

No. Section 28-78-104(b) and § 28-73-818(l) each say no duty to exercise is created.

Statutes and sources

• 2025 Ark. Acts 680, Ark. Code §§ 28-78-101 through 28-78-132 — complete Uniform Trust Decanting Act enactment, including its January 1, 2026 effective date and literal textual anomalies. Official session law (accessed September 12, 2026).
• 2023 Ark. Acts 293, Ark. Code § 28-73-818 — preserved appointment-to- second-trust route with its beneficiary, trustee, tax-interest, notice, document, Arkansas-connection, and special-needs rules. Official session law (accessed September 12, 2026).