Highlights of the Newly Enacted Uniform Trust Code

On July 8, 2012, Massachusetts enacted the Uniform Trust Code (UTC), which codifies the existing laws pertaining to trusts, but also clarifies, simplifies and modernizes the rules governing the administration of trusts. Massachusetts joins more than twenty states in adopting the UTC with the intent of providing trustees with greater flexibility in the administration of trusts, reducing the need for and frequency of court intervention to resolve disputes, and clarifying the rights and powers of trustees and beneficiaries. With a few exceptions, the UTC applies to all trust instruments whenever created, and generally replaces and expands upon the trust law provisions of the Massachusetts Probate Code, which took effect on March 31, 2012. Highlights of the UTC are as follows:

1. Trusts created after the enactment of the UTC are now presumed revocable, unless the trust includes express language to the contrary. This is a reversal of the longstanding Massachusetts default rule that presumed trusts were irrevocable.

2. The rules for modifying and terminating a trust have been relaxed. For example, if the settlor and beneficiaries agree, a court may approve the modification or termination of a non-charitable trust even if it is inconsistent with the original purpose of the trust.

3. The duties and powers of trustees are outlined in detail.

4. A trustee now has the duty to keep certain beneficiaries informed of the trust administration, including notifying the beneficiaries within thirty days of being appointed trustee, or the date on which the trust becomes irrevocable, of the trust name and address, and to provide annual statements of account to current beneficiaries.

5. Interested parties may now enter into binding, non judicial, settlement agreements to resolve disputes regarding trust interpretation, approval of accounts, directions to trustees, trustee liability and trustee powers.

6. A trustee and beneficiaries may now enter into compromise agreements to resolve questions.

7. A trustee may now be removed without cause, where removal is in the best interests of the beneficiaries and is not inconsistent with the trust purpose.

8. Trustees may now act by majority decision, unless the trust provides otherwise, reversing prior law which required trustees to act unanimously.

9. Allows for the establishment of “pet trusts” to facilitate and provide care for one or more animals.

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