Trust Decanting Requirements in Indiana
At a glance
| Governing law and available decanting route | Indiana Code ch. 30-4-10, Uniform Trust Decanting Act. “Decanting power” means authorized fiduciary's power to distribute first-trust property to ≥1 second trusts or modify first-trust terms; second trust includes modified first trust (§§ 30-4-10-12, -26) |
|---|---|
| First-trust scope, state connection, retroactivity, and opt-out | Trust created before/on/after July 1, 2022 with Indiana principal administration or specified Indiana governing-law connection; express trust irrevocable or revocable only with trustee/adverse-interest holder consent; solely charitable trust excluded. Express decanting/further-trust prohibition or restriction controls; general amendment, revocation, spendthrift, or transfer-restraint clause does not (§§ 30-4-10-1, -45) |
| Authorized fiduciary and required distribution power | Trustee, trust director, or other nonsettlor fiduciary with discretion to distribute/direct part/all principal to ≥1 current beneficiaries; court- appointed special fiduciary; or special-needs fiduciary. Special-needs route can descend from principal discretion to income discretion, then mandatory income/principal power (§§ 30-4-10-4, -39, -43) |
| Expanded, limited, mandatory, and ascertainable-standard branches | Expanded = discretionary distribution power not limited by ascertainable or reasonably definite standard; may decant covered principal subject to vested/ beneficiary limits. Limited = discretion limited by either standard; second trust must give each beneficiary substantially similar beneficial interests. Disability branch may treat qualifying fiduciary as expanded (§§ 30-4-10-3, -14, -24, -41 to -43) |
| Beneficiary, vested-interest, and power-of-appointment changes | Expanded route generally bars new current/remainder/successor beneficiaries and reduction/elimination of vested interests, but may retain/omit/create/ modify appointment powers and use broader/different appointee class. Limited route requires substantially similar interests. Disability branch permits qualifying special-needs terms while protecting other beneficiaries in aggregate (§§ 30-4-10-41 to -43) |
| Second-trust terms, duration, governing law, and administration | May distribute to ≥1 second trusts or modify first trust; expanded/limited second trusts may be created/administered under any jurisdiction. Duration may be same/different, but attributable property keeps first-trust maximum- perpetuity, accumulation, and alienation-suspension rules. Full decanting presumptively carries later property; partial leaves it unless terms provide otherwise (§§ 30-4-10-12, -41 to -42, -50, -56) |
| Tax, charitable, special-needs, compensation, and other guardrails | Detailed marital/charitable deduction, gift exclusion, S-corporation, GST, qualified-benefits, grantor-status, and other tax-benefit limits. Charitable interests protected; determinable interest gives Attorney General rights and may constrain governing law. Compensation increase, fiduciary-liability reduction, and remover-power changes restricted. Special-needs and animal- trust branches included (§§ 30-4-10-43 to -49, -53) |
| Notice, recipients, consent, waiver, objection, and representation | Record notice ≥60 days before exercise to living/existing settlors, qualified beneficiaries/representatives, present appointment-power holders, fiduciary removers, both trusts' fiduciaries, and Attorney General when applicable. Notice gives manner/effective date plus both instruments. Unknown/unlocatable/ unrepresented exceptions; all recipients may waive period by signed record; representation binds subject to pre-effectiveness objection (§§ 30-4-10-35 to -38) |
| Exercise instrument, court review, effectiveness, and remedies | Signed record must reference notice, identify both trusts, state property sent to each second trust and property remaining. Consent/court approval ordinarily unnecessary; listed parties may petition for instructions, special fiduciary, approval, ineffectiveness, corrective directions, or relief. Reasonable-care notice saving and noncompliant-provision cure apply; reliance protection and inherited debts/obligations stated; no special limitations period in chapter (§§ 30-4-10-33 to -34, -37, -39 to -40, -52, -57) |
Requirements one by one
Covered trusts and the fiduciary
Indiana Code § 30-4-10-1 reaches trusts created before, on, or after July 1, 2022 when the trust is principally administered in Indiana or its instrument supplies one of the listed Indiana-law connections. The ordinary route covers an express trust that is irrevocable or revocable only with the trustee's or an adverse- interest holder's consent; a solely charitable trust is excluded.
Under § 30-4-10-4, the ordinary authorized fiduciary is a trustee, trust director, or other nonsettlor fiduciary with discretion over some or all principal for current beneficiaries. The definition also includes a court- appointed special fiduciary and the special-needs fiduciary described below.
Expanded, limited, and disability routes
Expanded distributive discretion is not limited by an ascertainable or reasonably definite standard. Indiana Code § 30-4-10-41 permits that fiduciary to decant covered principal but generally prevents adding new current, presumptive- remainder, or successor beneficiaries and prevents reducing or eliminating a vested interest. It also allows carefully timed changes to appointment powers, including a broader or different appointee class.
Limited distributive discretion is constrained by an ascertainable or reasonably definite standard. Section 30-4-10-42 permits decanting of the covered principal only if the second trust gives each first-trust beneficiary substantially similar beneficial interests.
Section 30-4-10-43 adds a disability route. If no fiduciary has principal discretion, it can reach a nonsettlor fiduciary with income discretion and then one required to distribute income or principal. A qualifying special-needs fiduciary may use the expanded route when the second trust benefits the beneficiary with a disability and the exercise furthers the first trust's purposes.
Notice and the signed record
Indiana Code § 30-4-10-35 requires record notice no later than 60 days before exercise. Recipients include living or existing settlors; qualified beneficiaries and representatives; holders of presently exercisable appointment powers; people currently able to remove or replace the fiduciary; fiduciaries of both trusts; and, when the charitable rule applies, the Attorney General. The period begins on the notice day and ends 59 days later, but all persons entitled to notice may waive it in signed records.
The notice must describe the proposed manner and effective date and include both trust instruments. The exercise record itself must be signed by an authorized fiduciary, reference the notice, identify both trusts, say what property goes to each second trust, and identify what remains.
Court review, saving, and continuing obligations
Section 30-4-10-33 ordinarily allows exercise without anyone's consent or court approval. Section 30-4-10-39 nevertheless lets the listed parties ask a court for instructions, appointment of a special fiduciary, approval, an ineffectiveness ruling, corrective directions, or other relief.
A reasonable-care failure to reach one or more notice recipients does not by itself make the exercise ineffective. If a second-trust term is noncompliant, § 30-4-10-52 voids the impermissible provision or deems a required provision included to the extent necessary and requires corrective fiduciary action. Existing property debts, liabilities, and obligations remain enforceable to the same extent after decanting.
What trips people up
The 60-day notice period is mandatory unless every person entitled to notice waives the period in a signed record. Receipt, waiver, or expiration does not, however, cut off a person's right to petition over statutory noncompliance, abuse of discretion, breach of duty, or the saving rule.
The first trust may expressly prohibit or restrict decanting, and that language must carry into the second trust. A general no-amendment or no-revocation clause, spendthrift clause, or transfer restraint is not enough by itself.
Indiana Code § 30-4-10-49 consolidates the act's detailed tax restrictions; those limits are separate from § 30-4-10-44's charitable-interest protections and Attorney General role.
Common questions
Must the second trust stay under Indiana law?
Not ordinarily. The expanded and limited provisions allow another jurisdiction, but a determinable charitable interest can require Indiana administration unless the Attorney General does not object, consents, or a court approves.
Can the second trust last longer?
Its stated duration may differ, but property attributable to the first trust remains subject to the first trust's maximum-perpetuity, accumulation, and alienation-suspension rules.
What happens to property found later?
A complete decanting presumptively carries later-discovered or later-acquired 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
- Ind. Code ch. 30-4-10 — current 60-section Indiana Uniform Trust Decanting Act. Official 2026 chapter text (accessed September 12, 2026).
Source links
Every statute quoted above, linked, with the date we checked it.
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