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Bar News - October 8, 2004
Getting Started With the Uniform Trust Code
Drafting Tips
Editor's Note: The following list of tips was prepared by members of the faculty of the Sept. 16, 2004 NHBA CLE breakfast forum, "The NH Uniform Trust Code." The UTC becomes effective Oct. 1, 2004, in New Hampshire. The NHBA CLE program is available now on videotape, CD or audiotape and will soon be online under Online CLE. Several video replays also will be scheduled soon at locations around the state.
- When a trust becomes irrevocable or when a new trustee of an irrevocable trust accepts a trusteeship, the trustees must give qualified beneficiaries the notices described in Article 8-813 (b)(2) and (3). These notice requirements do not apply to pre-Code irrevocable trusts.
- A settlor can waive certain of the required trustee notices in the trust instrument. Article 105(b)(8) describes what cannot be waived. In preparing or amending trust instruments, clients should consider whether to waive some or all of the notice requirements.
- Any beneficiary who requests it must be given a complete copy of the trust instrument (Articles 813(a) and 110(a)), but the settlor can waive this obligation in the trust instrument.
- In drafting trusts giving discretion to trustees, consider the statutory limitations on words such as "absolute, "sole", "uncontrolled" and the like set forth in Article 8-814(a). These statutory limitations apply unless the trust instrument expressly provides otherwise. Article 8-814(b).
- Practitioners may wish to give thought to better documentation in a trust instrument of any preference of the settlor for discretionary distributions among beneficiaries. Otherwise, Article 8-803 mandates trustee impartiality in making distributions.
- An agent acting under a durable power of attorney may exercise a settlor's power to amend or revoke a trust or require distribution of trust property under Article 6-602. Consideration should be given to whether it is desirable for a client to provide such authorization to his/her agent and, importantly, the extent of the authorization.
- The statutory trustee powers, both in Article 8 of the UTC as well as those retained in RSA 564-A:3 are available to all trustees and all executors, unless the will or trust provides otherwise. There is no requirement that these powers be explicitly conferred upon fiduciaries in wills and trust instruments. This includes pre-Code wills and trusts which reference the Uniform Trustees' Powers Act as well as post-Code wills and trusts which reference the Uniform Trustees' Powers Act.
- Nonjudicial settlements are encouraged whenever possible (Article 1-111). Without the need for court appointment, representatives may act on behalf of the unborn, minors and others without capacity (Article 3).
- Keep in mind that most UTC provisions "fill in" where the trust instrument is silent. Practitioners may wish to review their trust forms and think about whether the trust instrument should remain silent on particular issues. Except as provided in Article 1-105, the trust instrument trumps the UTC.
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