Petition for Decanting (California)

PETITION FOR DECANTING (CONFIRMATION OF EXERCISE OF DECANTING POWER UNDER CAL. PROB. CODE §§ 19501–19530)

COURT INFORMATION

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF [________________________________]
PROBATE DEPARTMENT

Case No.: [________________________________]

Judge: Hon. [________________________________]

Hearing Date/Time: [__/__/____] at [____:____] [☐ a.m. ☐ p.m.]
Department: [____]

IN THE MATTER OF THE [NAME OF FIRST TRUST], A PETITION BY [________________________________] AS AUTHORIZED FIDUCIARY FOR CONFIRMATION OF EXERCISE OF DECANTING POWER UNDER CAL. PROB. CODE §§ 19501–19530

PETITION

Petitioner, [________________________________], as Authorized Fiduciary of the [Name of First Trust], by and through undersigned counsel, respectfully alleges as follows:

I. PETITIONER

1. Petitioner is [________________________________], the [☐ sole trustee ☐ co-trustee] of the [Name of First Trust] (the "First Trust"), and is an "authorized fiduciary" within the meaning of Cal. Prob. Code § 19502 because Petitioner has discretionary authority to distribute principal of the First Trust to or for the benefit of one or more current beneficiaries.

2. Petitioner's status as authorized fiduciary:
   ☐ Corporate trustee
   ☐ Independent individual trustee (not settlor, not beneficiary)
   ☐ Co-trustee with [________________________________]

3. Petitioner's contact information:
   Street: [________________________________]
   City: [________________] State: [____] Zip: [________]
   Telephone: [(___) ___-____] Email: [________________________________]

II. JURISDICTION AND VENUE

4. This Court has subject matter jurisdiction over this proceeding pursuant to Cal. Prob. Code § 17000 et seq. (Trust Law), § 17200(b)(13) (approving or directing the modification or termination of a trust), and § 19509 (court involvement in decanting under the California Uniform Trust Decanting Act).

5. The principal place of administration of the First Trust is in California, satisfying Cal. Prob. Code § 19505.

6. Venue is proper in [________________________________] County, California under Cal. Prob. Code § 17005(a) because (check the applicable basis):
   ☐ The principal place of administration of the First Trust is in this County (living or testamentary trust);
   ☐ The First Trust is testamentary, and the decedent's estate is administered in this County.

III. THE FIRST TRUST

7. The First Trust is the [________________________________] (the "First Trust"), created by [________________________________] (the "Settlor") by trust instrument dated [__/__/____] (the "First Trust Instrument"). A true and correct copy of the First Trust Instrument, together with all amendments, is attached as Exhibit A.

8. The First Trust is irrevocable. The Settlor is [☐ living ☐ deceased, died [__/__/____]].

9. The First Trust holds assets with an approximate fair market value of $[__________] as of [__/__/____]. A summary inventory is attached as Exhibit B.

10. The qualified beneficiaries of the First Trust (as defined in Cal. Prob. Code § 19502) are:

11. The discretionary distribution authority of the Petitioner-Authorized-Fiduciary under the First Trust is (check one):

☐ Expanded distributive discretion within the meaning of Cal. Prob. Code § 19502(k) — discretion not limited to an ascertainable or reasonably definite standard (e.g., absolute, sole, uncontrolled, comfort, welfare). Statutory decanting authority arises under Cal. Prob. Code § 19511.

☐ Limited distributive discretion within the meaning of Cal. Prob. Code § 19512(a) — discretion limited to an ascertainable or reasonably definite standard (e.g., HEMS — health, education, maintenance, support). Statutory decanting authority arises under Cal. Prob. Code § 19512, subject to the substantially-similar-interests requirement.

12. The trust provision granting discretion is quoted verbatim:

"[Quote the exact language of the discretionary distribution clause from the First Trust Instrument.]"

13. The First Trust [☐ does ☐ does not] contain an express provision prohibiting or limiting decanting, within the meaning of Cal. Prob. Code § 19515.

IV. THE SECOND TRUST

14. The Second Trust is the [________________________________] (the "Second Trust"). The proposed Second Trust instrument is attached as Exhibit C.

15. The Second Trust [☐ is a newly created trust ☐ is an existing trust to which Petitioner proposes to appoint the assets of the First Trust].

16. The trustee(s) of the Second Trust will be:

17. The beneficiaries of the Second Trust are:

V. STATUTORY AUTHORITY FOR DECANTING — CAL. PROB. CODE §§ 19511 OR 19512

A. ☐ Decanting Under Expanded Distributive Discretion — Cal. Prob. Code § 19511

18. Petitioner has expanded distributive discretion to distribute principal of the First Trust within the meaning of § 19502(k).

19. The current beneficiaries of the Second Trust are current beneficiaries of the First Trust, namely: [________________________________]. Current beneficiaries of the First Trust who are excluded from the Second Trust: [________________________________ / None].

20. The successor and remainder beneficiaries of the Second Trust are successor and remainder beneficiaries of the First Trust, namely: [________________________________].

21. Petitioner [☐ does ☐ does not] propose to grant a power of appointment in the Second Trust. If granted, the class of permissible appointees is consistent with § 19511(d)–(e).

B. ☐ Decanting Under Limited Distributive Discretion — Cal. Prob. Code § 19512

22. Petitioner's discretion to distribute principal under the First Trust is limited by an ascertainable or reasonably definite standard (HEMS or comparable).

23. Petitioner has limited distributive discretion over the principal proposed for decanting, within the meaning of § 19512(a)–(b). ☐ Confirmed.

24. The Second Trust or trusts, taken together, grant each beneficiary of the First Trust beneficial interests substantially similar to that beneficiary’s interests in the First Trust, as required by § 19512(c). ☐ Confirmed.

25. The comparison attached as Exhibit [____] identifies any change to a beneficiary’s beneficial interests and explains why the change is not material under § 19512(c). ☐ Confirmed.

C. ☐ Special-Needs Decanting — Cal. Prob. Code § 19513

26. The decanting is undertaken to qualify a beneficiary with a disability (the "Disabled Beneficiary," [________________________________]) for governmental benefits, and the Second Trust will be administered as a special needs trust consistent with § 19513.

VI. COMPARISON OF FIRST TRUST AND SECOND TRUST PROVISIONS

27. The material differences between the First Trust and the Second Trust are summarized in the following table. A complete redlined comparison is attached as Exhibit D.

VII. COMPLIANCE WITH STATUTORY LIMITATIONS

28. Petitioner-Authorized-Fiduciary certifies that the proposed exercise of the decanting power:

☐ Does not violate any express prohibition or limitation in the First Trust within the meaning of Cal. Prob. Code § 19515.

☐ Does not reduce or eliminate a vested interest — including any beneficiary's current right to a mandatory distribution of income or principal, mandatory annuity or unitrust interest, or presently exercisable right of withdrawal — within the meaning of § 19511(a) and (c)(3).

☐ Does not impair any charitable interest unconditionally vested in a charitable organization or held for a charitable purpose (§ 19514).

☐ Does not jeopardize: (i) the marital deduction (IRC §§ 2056, 2523) (§ 19519(b)(1)); (ii) the charitable deduction (IRC §§ 2055, 2522, 642(c), 170) (§ 19514, § 19519(b)(2)); (iii) the gift-tax annual exclusion (IRC § 2503(b), (c)) (§ 19519(b)(3)); (iv) any grandfathered GST status (Treas. Reg. § 26.2601-1(b)(4)) (§ 19519(b)(8)); (v) any allocated GST exemption or zero-inclusion-ratio status (IRC § 2642; Treas. Reg. § 26.2654-1) (§ 19519(b)(5)); (vi) the grantor or non-grantor trust income-tax classification (IRC §§ 671–679) (§ 19519(b)(9), (10)); or (vii) any S-corporation shareholder eligibility (IRC § 1361) (§ 19519(b)(4)).

☐ Does not increase Petitioner's compensation above the amount specified in the First Trust, or, if none is specified, above the amount permitted by the Probate Code, unless all qualified beneficiaries of the Second Trust consent in a signed writing or the Court approves the increase. An incidental compensation change resulting from other changes to the trust is not an increase for this purpose (Cal. Prob. Code § 19516).

☐ Is consistent with the fiduciary duties owed under Cal. Prob. Code §§ 16000 et seq. and § 19504 (purposes of the First Trust).

VIII. GST INCLUSION-RATIO ANALYSIS (Treas. Reg. § 26.2654-1; § 26.2601-1(b)(4))

29. The GST tax status of the First Trust is:

☐ Grandfathered (irrevocable on or before September 25, 1985) — Treas. Reg. § 26.2601-1(b)(1).
☐ Non-grandfathered with GST exemption fully allocated (zero inclusion ratio).
☐ Non-grandfathered with partial GST exemption allocation (inclusion ratio = [____]).
☐ Non-grandfathered with no GST exemption allocated (inclusion ratio = 1.0).
☐ Not a GST-relevant trust.

30. The proposed decanting [☐ will ☐ will not] cause the First Trust to lose grandfathered status under Treas. Reg. § 26.2601-1(b)(4). The basis for this conclusion is set forth in the tax analysis attached as Exhibit F, including analysis under the applicable rules in Treas. Reg. § 26.2601-1(b)(4)(i)(A)–(D).

31. If the Second Trust constitutes a severance of the First Trust, the severance [☐ does ☐ does not] qualify as a "qualified severance" under Treas. Reg. § 26.2642-6, preserving the separate inclusion ratios of the resulting trusts.

32. No portion of the assets of the First Trust having a zero inclusion ratio will be commingled with assets having an inclusion ratio greater than zero in the Second Trust, except as a permissible qualified severance.

IX. NOTICE PURSUANT TO CAL. PROB. CODE § 19507 (60-DAY NOTICE)

33. Petitioner [☐ has provided ☐ will provide] not less than 60 days' written notice of the proposed exercise of the decanting power — including a statement of the reason for the proposed decanting, an explanation of the differences between the First Trust and the Second Trust, the proposed effective date, a copy of the First Trust instrument, copies of all Second Trust instruments, and the bold-type contest warning required by § 19507(g) — to each of the following persons:

34. The decanting [☐ has become ☐ will become] effective on [__/__/____], being not less than 60 days after the last required notice, unless all persons entitled to notice have waived the notice period in writing.

35. Proofs of service / acknowledgments of notice are attached as Exhibit G.

36. Representation. Identify any person authorized to represent and bind a beneficiary under § 19508: [________________________________]. Unless the trust instrument provides otherwise, give § 19507(d) notice to a guardian ad litem for a minor qualified beneficiary without a representative, or an unascertained or unborn beneficiary; if none has been appointed, seek appointment. Record representative or guardian ad litem and basis: [________________________________].

X. FACTUAL BASIS FOR DECANTING

37. The First Trust was established by the Settlor for the following purposes: [________________________________].

38. Since the creation of the First Trust, the following circumstances have arisen warranting the exercise of the decanting power:

[________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________]

39. The exercise of the decanting power is consistent with the purposes of the First Trust within the meaning of Cal. Prob. Code § 19504 because: [____________].

XI. PRIOR PROCEEDINGS

40. There are no prior or pending court proceedings involving the First Trust except: ☐ None ☐ [____________].

XII. PRAYER FOR RELIEF

WHEREFORE, Petitioner respectfully prays that this Court, pursuant to Cal. Prob. Code §§ 17200(b)(13) and 19509, enter an Order:

A. Finding that the Court has jurisdiction over the parties and the subject matter pursuant to Cal. Prob. Code §§ 17000 et seq., 17200(b)(13), and 19509, and that venue is proper under § 17005;

B. Finding that the principal place of administration of the First Trust is in California within the meaning of Cal. Prob. Code § 19505;

C. Finding that Petitioner is an "authorized fiduciary" within the meaning of Cal. Prob. Code § 19502 and has [expanded / limited] distributive discretion to distribute principal of the First Trust;

D. Finding that the proposed exercise of the decanting power complies with Cal. Prob. Code § 19511 [or § 19512, or § 19513] and does not violate the limitations of §§ 19514, 19515, 19516, or 19519;

E. Finding that not less than 60 days' written notice has been given in accordance with Cal. Prob. Code § 19507, and that no person entitled to notice has objected [or that all objections have been considered and resolved];

F. Finding that the proposed decanting does not cause the First Trust to lose grandfathered GST status (where applicable) or otherwise jeopardize the federal estate, gift, GST, charitable, or income tax benefits of the First Trust;

G. Approving and confirming the exercise of the decanting power by Petitioner, appointing all (or such portion as specified) of the principal of the First Trust to the trustee(s) of the Second Trust, on the terms set forth in the proposed Second Trust instrument (Exhibit C) and the exercise instrument (Exhibit E);

H. Directing that the Second Trust be administered in accordance with its terms following the effective date of the decanting, and that the First Trust be terminated (if all assets decanted) or continued (if partial decanting);

I. Granting Petitioner fiduciary protection for actions taken in good-faith reliance on this Order;

J. Awarding Petitioner's reasonable attorney's fees and costs payable from the First Trust to the extent permitted by Cal. Prob. Code § 15684 (trustee's right to repayment of expenditures properly incurred in administration) and applicable law;

K. Retaining jurisdiction to enforce or further interpret this Order; and

L. Granting such other and further relief as the Court deems just and equitable.

XIII. VERIFICATION

I, [________________________________], declare under penalty of perjury under the laws of the State of California that I am the Petitioner named in the foregoing Petition and am the Authorized Fiduciary of the First Trust. I have read the Petition and know the contents thereof; the same is true to my own knowledge except as to those matters stated upon information and belief, and as to those matters I believe them to be true.

Executed at [__________________________], California on [__/__/____].

________________________________
[Trustee-Petitioner Signature]

XIV. SIGNATURE OF ATTORNEY

Respectfully submitted,

Dated: [__/__/____]

________________________________
[Attorney Name]
[Firm Name]
[Address]
[Telephone] | [Email]
California State Bar No. [____________]
Attorney for Petitioner

XV. PROOF OF SERVICE

I, [________________________________], declare that I am over the age of 18, not a party to this action, and a resident or employed in [________________________________] County, California. On [__/__/____] I served the foregoing Petition for Decanting, together with all Exhibits and the Notice of Hearing, upon the persons listed in Section IX above by the methods and on the dates indicated, in accordance with Cal. Prob. Code §§ 17203 and 19507.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

________________________________
[Signature] Date: [__/__/____]

EXHIBITS

• Exhibit A: First Trust Instrument dated [__/__/____] and all amendments
• Exhibit B: Inventory of First Trust assets as of [__/__/____]
• Exhibit C: Proposed Second Trust Instrument
• Exhibit D: Redlined comparison of First Trust and Second Trust provisions
• Exhibit E: Instrument exercising the decanting power (Cal. Prob. Code § 19510)
• Exhibit F: Tax analysis — GST inclusion ratio (Treas. Reg. § 26.2654-1; § 26.2601-1(b)(4)); marital, charitable, S-corp, and income tax classifications
• Exhibit G: Notices given under Cal. Prob. Code § 19507 and proofs of service / acknowledgments
• Exhibit H: Trustee certification of authority and discretion type (expanded vs. limited)
• Exhibit I: Written waivers of notice period or written consents (if any) from persons entitled to notice
• Exhibit J: Any objections received within the 60-day notice period and trustee response
• Exhibit K: California Attorney General acknowledgment (if charitable interest implicated)

CALIFORNIA-SPECIFIC PRACTICE NOTES

California adopted the UTDA. Effective January 1, 2019, California enacted the Uniform Trust Decanting Act at Cal. Prob. Code §§ 19501–19530, replacing the prior, narrower common-law and § 16002 fiduciary-based authority. Pre-2019 decantings should be analyzed under the prior framework; on or after January 1, 2019, the Act governs.

Bifurcation by discretion type. § 19511 (expanded distributive discretion) permits broad changes including exclusion of remainder beneficiaries (but may not add new current/remainder beneficiaries or reduce a vested interest); § 19512 (limited distributive discretion / ascertainable standards) requires that each beneficiary's beneficial interests remain substantially similar.

60-day notice. § 19507 requires notice at least 60 days before the exercise of the decanting power, unless all persons entitled to notice waive that period in signed waivers. Notice must include a statement of the reason for the decanting, an explanation of the differences between the first and second trusts, a copy of the first-trust instrument, copies of all second-trust instruments, and a bold-type contest warning, and must reach the settlor (if living), all qualified beneficiaries, holders of presently exercisable powers of appointment, persons with the right to remove or replace the authorized fiduciary, other fiduciaries of the first trust, and the fiduciary of the second trust. (§ 19507 was amended by Stats. 2023, Ch. 260 (SB 345), effective January 1, 2024, updating the service mechanics under § 1215.)

Attorney General notice. § 19514 and § 19507(c)(7) require notice to the California Attorney General whenever a charitable interest is implicated. This is enforced through the Charitable Trusts Section of the AG's office.

Special-needs decanting. § 19513 lets a special-needs fiduciary decant under § 19511 (as if it had expanded distributive discretion) to qualify a beneficiary with a disability for governmental benefits, relaxing the beneficiary-limitation rules of § 19511(c) that would otherwise apply.

Court approval optional but powerful. § 19509 authorizes — but does not require — court application for instructions, approval, appointment of a special fiduciary, or a determination that a proposed exercise is ineffective. Petitioner proceeds under Prob. Code § 17200(b)(13). Confirmation is recommended whenever (a) interested persons have objected, (b) tax-sensitive trusts (GST, marital, charitable) are involved, (c) the decanting materially alters beneficial interests, (d) special-needs modification under § 19513 is proposed, or (e) the trustee seeks fiduciary protection.

Tax safeguards (§ 19519). California's UTDA contains express tax-savings provisions. Treas. Reg. § 26.2601-1(b)(4) safe harbors must be analyzed for grandfathered GST trusts; Treas. Reg. § 26.2642-6 governs qualified severance for inclusion-ratio purposes; marital, charitable, S-corp, and grantor-trust classifications must all be preserved.

Compensation (§ 19516). An increase above the compensation specified in the First Trust, or above the amount the Probate Code permits if the trust is silent, requires either signed consent from all qualified beneficiaries of the Second Trust or court approval. A change incidental to other changes made by decanting is not an increase for this purpose.

Representation (§§ 19507(d), 19508). Notice to a person authorized to represent and bind another has the same effect as direct notice. Unless the trust instrument provides otherwise, § 19507(d) requires guardian ad litem notice for a minor qualified beneficiary without a representative, or an unascertained or unborn beneficiary; seek appointment if none exists.

Trust-instrument prohibitions (§ 19515). A settlor may restrict or prohibit decanting in the trust instrument; check the First Trust for any such limitation before exercising.

Forum. Los Angeles, San Francisco, San Diego, Orange County, and Santa Clara Superior Courts maintain dedicated Probate Departments with experience in trust matters. File in the county of the principal place of administration under Prob. Code § 17005.

SOURCES AND REFERENCES

• California Probate Code §§ 19501–19530 (Uniform Trust Decanting Act, effective January 1, 2019)
• California Probate Code §§ 17000 et seq. (Trust Law)
• California Probate Code § 17200(b)(13) (court jurisdiction to approve or direct the modification or termination of a trust)
• California Probate Code §§ 16000 et seq. (fiduciary duties of trustee)
• 26 U.S.C. § 2642 (GST inclusion ratio)
• Treas. Reg. § 26.2601-1(b)(4) (grandfathered GST trust modifications)
• Treas. Reg. § 26.2642-6 (qualified severance); Treas. Reg. § 26.2654-1 (certain trusts treated as separate trusts)
• Uniform Trust Decanting Act (2015) (Uniform Law Commission)
• California Lawyers Association, Trusts and Estates Section, Practice Materials on Cal. Prob. Code §§ 19501–19530
• California Attorney General, Registry of Charitable Trusts (charitable-interest notice)