Trust Decanting Requirements in Virginia
At a glance
| Governing law and available decanting route | Va. Code §§ 64.2-779.1 to -779.25, Uniform Trust Decanting Act. “Decanting power” distributes first-trust property to ≥1 second trusts or modifies/ restates first trust; expanded, limited, special-needs, and animal-trust branches (§§ 64.2-701, -779.1 to -779.25) |
|---|---|
| First-trust scope, state connection, retroactivity, and opt-out | Express trust irrevocable or settlor-revocable only with trustee/adverse- interest-holder consent; solely charitable trust excluded. Covers pre- July 1, 2017 and later trusts principally administered in Virginia or choosing Virginia law for administration, construction, or meaning/effect. Express prohibition/restriction controls and carries forward; general no-amendment, spendthrift, or transfer restraint alone does not (§§ 64.2-779.1, -779.3, -779.12) |
| Authorized fiduciary and required distribution power | Trustee/other nonsettlor fiduciary with income/principal discretion or direction power to ≥1 current beneficiaries, excluding current/termination beneficiary, beneficiary-controlled related/subordinate replacement, and support-obligated individual; also court special fiduciary or special-needs fiduciary. Majority of authorized fiduciaries acts. Must follow duties/first- trust purposes; no duty to exercise/inform (§§ 64.2-701, -779.2, -779.5(I)) |
| Expanded, limited, mandatory, and ascertainable-standard branches | Expanded means not limited by ascertainable/reasonably definite standard; limited means limited by either, and both reach income or principal subject to authority. Limited aggregate interests must be substantially similar but qualifying contingent age/event distribution may be deferred. Mandatory or income-only authority qualifies only through disability route when no higher fiduciary exists (§§ 64.2-701, -779.8 to -779.10) |
| Beneficiary, vested-interest, and power-of-appointment changes | Expanded route cannot add new current or presumptive-remainder/successor beneficiary outside first-trust groups or reduce/eliminate vested interest; may retain/omit/create/modify appointment powers with broader/different appointee class under § -779.8(D)-(E). Limited route requires substantially similar aggregate interests, including statutory deferred-distribution safe form. Special-needs route relaxes disabled beneficiary's class/vested limits but protects others (§§ 64.2-779.8 to -779.10) |
| Second-trust terms, duration, governing law, and administration | Second trust includes modified/restated first trust or receiving trust; expanded/limited second trusts may use any jurisdiction. Partial/multiple trusts allowed. Same/different duration, subject to first property's perpetuity, accumulation, and alienation-suspension rules. Chapter applies to second-trust terms; settlor attribution, complete/partial later-property defaults, obligations, and continued commissioner accounting stated (§§ 64.2-701, -779.7 to -779.9, -779.17, -779.21 to -779.25) |
| Tax, charitable, special-needs, compensation, and other guardrails | Solely charitable trust excluded; other charitable interest cannot be diminished/altered, with Attorney General representation and Virginia-law default. Disability and animal routes. Qualified-beneficiary consent or court approval for compensation increase; aggregate liability cannot decrease; remover-power change requires stated consent/court route. Preserve marital, charitable, annual-exclusion, S-corp, GST, retirement, grantor, and other tax benefits; limited route has tax-driven appointment-power exception (§§ 64.2-779.10 to -779.16, -779.20) |
| Notice, recipients, consent, waiver, objection, and representation | Generally no consent/court approval; record notice ≥60 days before exercise to living/existing settlor, each qualified beneficiary, present appointment- power holder, remover/replacer, other first-trust and each second-trust fiduciary, advisor/protector, adverse-interest revocation consenter, and AG for determinable charity. Give manner/date and both instruments. Unknown/ unlocatable exception; all recipients may waive period in signed record; AG represents determinable charity (§§ 64.2-779.5, -779.11) |
| Exercise instrument, court review, effectiveness, and remedies | Signed record identifies first/second trust(s) and property distributed/held under each or retained; no acknowledgment, notarization, or public filing. Court may instruct, appoint special fiduciary, approve, declare ineffective, apply saving, or grant other relief. Reasonable reliance protected; reasonable- care notice failure not automatically fatal; invalid term void/deemed included when exercise otherwise effective. No special limitations period (§§ 64.2-779.4 to -779.7, -779.19) |
Requirements one by one
Virginia reaches income or principal through two power tiers
Expanded distributive discretion is not limited by an ascertainable or reasonably definite standard; limited discretion is. Either route can reach the income or principal actually subject to that authority. The expanded branch offers broader beneficiary and appointment-power changes, while the limited branch requires substantially similar aggregate beneficial interests.
“An authorized fiduciary that has limited distributive discretion over the income or principal of the first trust ... may exercise the decanting power over the income or principal of the first trust.” — Va. Code § 64.2-779.9(B)
The disability branch can treat qualifying limited, income-only, or mandatory authority as expanded when a special-needs trust benefits the person with a disability and the exercise furthers first-trust purposes.
Limited discretion can still postpone a contingent distribution
Substantially similar does not mean word-for-word identical. Section 64.2-779.9(C) expressly permits postponing a contingent age- or event-triggered outright distribution when the deferred property benefits only that beneficiary during life and the beneficiary receives the stated testamentary-general-power or estate-payment protection.
Expanded discretion cannot add beneficiary categories outside the first trust or reduce a vested interest, but it can create or modify appointment powers under § 64.2-779.8(D), with a broader or different appointee class.
The advance notice has nine recipient categories
The 60-day record notice runs from the day given through the next 59 days. It goes to the living or existing settlor, qualified beneficiaries, present appointment-power holders, the current remover or replacer, other first-trust and each second-trust fiduciary, first-trust advisors or protectors, adverse-interest holders whose consent is needed to revoke, and the Attorney General when the determinable-charity rule applies. It states the manner and proposed date and includes the first and all second trust instruments.
All recipients can waive the period in a signed record. Receiving or waiving notice does not eliminate a later court application, while reasonable-care failure to reach a recipient does not automatically invalidate the exercise.
A signed exercise record is separate from optional court review
The signed record identifies the first and second trusts and allocates property to or under each second trust or leaves it in the first. The article adds no acknowledgment, notarization, or public filing. A court application is optional; the court may instruct, appoint a special fiduciary, approve, declare an exercise ineffective, apply the saving provision, or grant other relief.
Charitable, tax, compensation, and liability limits remain
Solely charitable trusts are excluded, while a determinable charitable interest gives the Attorney General qualified-beneficiary rights and ordinarily keeps the charitable second trust under Virginia law. The statute also protects marital, charitable, annual-exclusion, S-corporation, zero-inclusion, qualified-benefit, grantor, and other tax attributes.
Any compensation increase above the first instrument's amount or the chapter's permitted amount—not merely a material increase—needs all qualified second-trust beneficiaries' signed consent or court approval. Aggregate fiduciary liability cannot decrease, and changing another person's removal power requires a stated consent or court route.
What trips people up
“No consent and no court approval” is the ordinary rule, not the end of the analysis. A charitable objection, compensation increase, removal-power change, animal-trust protector consent, or first-trust prohibition can change what a particular exercise requires.
Virginia also carries an accounting tail: if first-trust accounts are filed with the commissioner of accounts, second-trust accounts must continue there unless a court orders otherwise.
Common questions
Must a distribution otherwise be due now?
No. Section 64.2-779.18 permits exercise whether or not the fiduciary would have made, or could have been compelled to make, a discretionary distribution then.
What happens to later-discovered property?
Unless the exercise or second-trust terms provide otherwise, it follows a complete decanting into the second-trust estate but remains in the first trust after a partial exercise.
Do obligations disappear when property moves?
No. Section 64.2-779.24 keeps a debt, liability, or other obligation enforceable to the same extent against the property in the second trust.
Statutes and sources
- Va. Code § 64.2-701 — current authorized-fiduciary, decanting-power, expanded-discretion, and second-trust definitions. Official text (accessed September 12, 2026).
- Va. Code §§ 64.2-779.1 to -779.5 — scope, duties, retroactivity and Virginia connection, reliance, notice, waiver, and majority action. Official Article 8.1 text (accessed September 12, 2026).
- Va. Code §§ 64.2-779.6 to -779.10 — court, signed record, expanded, limited, deferred-distribution, and special-needs rules. Official Article 8.1 text (accessed September 12, 2026).
- Va. Code §§ 64.2-779.11 to -779.16 — charitable interests, trust limits, compensation, liability, removal powers, and tax protections. Official Article 8.1 text (accessed September 12, 2026).
- Va. Code §§ 64.2-779.17 to -779.25 — duration, present need, saving, animal trusts, second-trust terms, settlor, later property, obligations, and accountings. Official Article 8.1 text (accessed September 12, 2026).
Source links
Every statute quoted above, linked, with the date we checked it.
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