From Knights to Decanting: Why Modern Estate Planning Is at War With Settlor Intent

 

Last week was National Estate Planning Awareness Week. In this blog, I offer three factoids about estate planning in 2026, point out two trends in estate planning that arguably conflict, and three conclusions about where we are right now.

  1. Most estate planners don’t know that while we call the document a “last will and testament” today; originally, there were two different documents: A “Will” (from Anglo-Saxon/Old English) “devised” real estate, while a “Testament” (from Norman French) “bequeathed’ personal property. Why? Principally because a woman wasn’t allowed to devise real estate by Will without the consent of her husband, but she could bequeath personal property in a testament. When the documents were combined into one, both names were retained and essentially are used interchangeably.
  2. Until fairly recently (maybe 150 years ago), many Wills (last will and testament shortened in terms) began with the sentence: “IN THE NAME OF GOD, AMEN.”
  3. The power of appointment began as an artifice. It was invented and originally primarily used to get around the rule that the lands of knights were not devisable to make land in effect devisable. The power of appointment started out as an artifice to get around centuries old property law.

In 1540, the Statute of Wills opened up more devisable property, but there was still considerable property (⅔) of the knights that was insusceptible of devise, necessitating the continued use of powers of appointment.

In the eighteenth and nineteenth centuries, English lawyers used the general power of appointment to not only give needed flexibility to the clunky common law property system, but also to avoid dower and curtesy (predecessors to the elective share), and creditors as well as addressing the incapacity of married women to convey-again as an artifice. 

Why was the land of the knights not devisable, you might ask? Because the knight didn’t own the land; he had a fief. Well, that ends up being the Crown’s leverage over the knights and the Barons and Earls-either be on the Crown’s team, or not only might you end up dead or in the Tower of London, but the Crown might confiscate your property, including your lands, and give it to a more loyal subject retainer. Of course, the English Crown has at times had a prickly relationship with its main retainers, the Barons-Magna Carta in 1215 between King John and about 25 Barons. Eventually, the right to devise real estate was a right of all men (first, and now all people, men and women).

As a final nod to the 2026 edition of Estate Planning Awareness Week, an exhibition of whistling through the graveyard of estate planning by Emplatre, who can neither whistle, roller-skate nor blow bubble-gum bubbles:

We have some arguably competing trends in estate planning that create some serious cognitive dissonance:

  1. FREEDOM OF TESTATION AND ABROGATION OF THE RULE: The end of primogeniture and beginning of true freedom of testation (save spousal election of the marital share and pretermitted child or forced heirship), together with the relaxation/effective abrogation of the Rule Against Perpetuities (the “Rule”), which was developed to restrict excessive dead hand control by the settlor. However, the current trend in the United States is to move away from the restrictions of the Rule, which, ostensibly, confirms a settlor’s ability to exert dead hand control. Thus, a trust today supposedly allows a settlor to set the parameters of enjoyment/entitlement of the trust res and the identities of the beneficiaries, both now and into the future, making settlor/testator intent paramount. But is that so?
  2. EASE BY WHICH A TRUST CAN BE REWRITTEN, EVEN OPPOSED TO THE SETTLOR’S INTENT: The rapid increase in Non-Judicial Settlement Agreements, trust modifications and commutations, as well as decantings, all of which can rewrite and undercut original settlor/testator intent.

Unfortunately, the belief in and use of decanting has gotten way out of hand and way beyond what the testator/settlor intended, especially when a scrivener builds in a right to decant, i.e., rewrite the settlor’s intent, without telling the client settlor/testator or explaining the breadth of the flexibility of the decanting power holder to radically alter the settlor’s plan beyond recognition.

I predict at least one successful reversal of a decanting amd upholding a claim of tortious interference with the right to inherit where the changes were such that the power to decant permitted going further than the client would’ve wanted or permitted had the scrivener even discussed it with the client settlor.  

[Excerpted from an article freely available on my website entitled “From the School of Hard Knocks: Thoughts on the Initial Estate Planning Interview,” originally published in the ACTEC Journal in 2002, but which has been updated and expanded multiple times] Estate and financial planning advisors, and the clients whom they attempt to serve, may not have enough experience with the effects that flow from the long-term use of some of the techniques, e.g., the long-term social and psychological impacts of the use of dynasty trusts?

[O]ne would have to conclude initially that the real public policy under-girding the classical rule against perpetuities (“RAP”) had a non-tax genesis since it pre-dated the federal transfer tax.  Query … states repealing or effectively repealing RAP (primarily driven by the urge to beat the federal transfer tax) and in enhancing asset protection laws through anti-creditor provisions (in an attempt to attract capital and investment in the state), is grounded in solid social policy, or is it merely a race to the bottom by competitive states?

Is it moral or proper public policy for states to enact laws that assist in the avoidance or reduction of a federal tax?

My conclusions:

  1. More circumspection should be required before forming a dynasty trust that can’t be ended or more flexibility on changing trustees.
  2. Some trustee-friendly jurisdictions have become inadvertently ANTI-BENEFICIARY-estate planners should watch that.
  3. Every estate planning document scrivener should highlight for clients where the flexibility built in whether through power of appointment/distribution or decanting could wholly rewrite their plan and have them sign off or acknowledge that provision to protect themselves, together with much more discernment and circumspection before creating such a clause in a will or trust.

Prorsum et sursum, y’all!!!