Significant Trends in the Trust Law of the United States

By Halbach, Edward C., Jr. | Vanderbilt Journal of Transnational Law, May 1999 | Go to article overview
Save to active project

Significant Trends in the Trust Law of the United States


Halbach, Edward C., Jr., Vanderbilt Journal of Transnational Law


I. INTRODUCTION

In examining significant trends in American trust law, several observations are worth mentioning at the outset. First, trust law in the United States is primarily a matter of state law; thus, the trends discussed below may appear in some states but not in others.(1) Second, procedural merger of law and equity in this country has been substantially accomplished in nearly all states, but this should not be understood as eliminating the importance of equitable doctrine and remedies. Third, without abandoning the basic definition of a trust as a fiduciary relationship,(2) there appear to be subtle but practically significant departures from the traditional concept that a trust is not an "entity."(3) Certainly, the tax law has long treated the typical trust as an entity separate from the trustee.(4) In addition, an increasing number of states draw a distinction for various purposes between the trustee personally and the trustee's fiduciary or "representative" capacity.(5)

Property owners in the United States and elsewhere are generally living longer, often into longer periods of diminished physical or mental health. In addition, it is generally accepted that today broader segments of society than in the past are using trusts, and with a greater diversity of objectives,(6) but increasingly without the aid of legal counsel who are highly skilled in estate planning and trust practice.(7) Perhaps these factors are playing some role in the "user friendly" responses below, making the trust law more sympathetic to the results of error or oversight and more sensitive to the broad variety of trusts, trusteeships, settlor objectives, and beneficiary circumstances.

Part II of this Article will describe substantive trust law in the United States, in particular the creation, interpretation, and reformation of trusts, as well as trust termination and modification. Revocable inter vivos trusts, spendthrift trusts, and related topics will also be addressed. Part III will discuss fiduciary standards, focusing on the duties of the trustee and the rights of beneficiaries.

II. SUBSTANTIVE TRUST LAW

A. Creation of Trusts

The new and developing Restatements(8) of Property and Trusts (Property Third and Trusts Third), the Uniform Probate Code (UPC), and early but distinct trends in other statutory and common law authorities are moving American law in the direction of upholding property owners' attempts to establish trusts in situations in which traditional law would have found a transfer defective or an expression of trust intent deficient on some technical or formal ground. This tendency exists whether the transfer is made during life or at death, as long as there is evidentiary and circumstantial security that the trust represents the settlor's properly considered, final intention. Moreover, this trend is evident in various other areas: in legislative or judicial acceptance of some form of "harmless error," "substantial compliance," or "dispensing power" doctrine;(9) in increased tolerance of certain failures to satisfy the Statute of Frauds(10) or the requirements for a completed inter vivos transfer;(11) and in increasingly sympathetic views of attempts to create "semi-secret" testamentary trusts.(12)

American law is finally beginning to clarify and refine rules concerning capacity to create, amend, and revoke inter vivos trusts, recognizing that the degree of capacity to create a revocable trust should be no higher than that to execute a will.(13) The creation of an irrevocable inter vivos trust should depend on whether the trust is purely donative, in which case a gift standard is appropriate,(14) or whether it is part of a negotiated or adversary transaction, for which the higher contract standard would be appropriate.(15)

Similarly, state law throughout the country is beginning to come to grips with issues concerning the creation, amendment, and revocation of trusts on behalf of incapacitated persons by their personal fiduciaries.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Significant Trends in the Trust Law of the United States
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?