#4: The Default And Mandatory Rules Under The Uniform Trust Code Will Be Fleshed Out
The Uniform Trust Code (and the various modified versions adopted by the various states) contains a provision for default rules that control over the terms of any trust. In other words, the trust settlor cannot draft around them. A few of the default rules are rather broad, such as the duty of a trustee to act in good faith. Estate planning attorneys occasionally seek to limit a trustee’s duties or liability in a manner that could arguably conflict with one or more of the default duties (especially the duty of a trustee to act in good faith).
Given that many states have adopted the Uniform Trust Code (or a modified version) within the past decade or so, there is not much case law that governs when and to what degree the default rules will prevail over certain terms of a trust that seek to limit a trustee’s duties or liability in various scenarios. We can expect to see a sizeable amount of litigation on this subject in both 2018 and the years to follow.
Will Sleeth is a partner in national law firm LeClairRyan's Williamsburg, Va. office, who also leads the firm’s estate and trust litigation team.