Structuring Directed Trust Provisions: Granting Powers to Non-Trustees Under Uniform Directed Trust Act

Bifurcating Trust Duties, Applying Fiduciary Rules to Trust Directors, Protecting Beneficiaries

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Tuesday, May 8, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE/CPE webinar will provide estate planning counsel and advisers with a practical guide to structuring special or “directed” trusts that grant power over a trust to a person who is not a trustee. The panel will discuss the specific challenges and opportunities in assigning duties between directed persons and trustees and detail the provisions of the Uniform Directed Trust Act (UDTA) that may be applied to draft or amend directed trusts.

Description

Directed trusts are being utilized with increased frequency by estate planners due to the flexibility of these instruments. The recent issuance of the Uniform Directed Trust Act (UDTA) provides guidance on areas of uncertainty about the fiduciary status of non-trustee directors and will likely facilitate the drafting of directed trusts as a planning vehicle.

Directed trusts grant powers to act within the trust to persons other than the designated trustee, thus bifurcating authority for trust activities. In a directed trust, a trustee may only exercise trust power at the instruction or authorization of the trust director. Typically, directed trusts appoint trust protectors, investment advisers, or third parties to make distribution decisions and handle beneficiary notifications.

While most states have statutes authorizing directed trusts, there is significant uncertainty as to the fiduciary status of trust directors and the extent of fiduciary liability exposure for directed trustees. The passage of the UDTA, which several states have already begun to adopt, should clarify and standardize the fiduciary treatment of trust directors.

The UDTA proposes standardization of the fiduciary rules governing trust directors and directed trustees to provide uniform protection for beneficiaries. The UDTA also offers drafting guidance on issues often overlooked in structuring directed trusts. Estate counsel should have a thorough understanding of the coming changes to directed trusts to provide greater flexibility for grantors.

Listen as our experienced panel offers a solid and practical guide to structuring directed trusts in light of the issuance of the UDTA.

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Outline

  1. Common terms and provisions of directed trusts
  2. Fiduciary issues with trust directors
    1. Identifying party responsible for loss or breach of duty
    2. Specifying what powers are outside of the trustee’s scope of responsibility
    3. Establishing duties of trust directors
  3. Uniform Directed Trust Act
  4. State approaches to directed trusts
  5. Using directed trusts for specific trust applications
  6. Drafting tools and modifying existing directed trusts

Benefits

The panel will review these and other critical issues:

  • What are key states’ approaches to directed trusts?
  • What are the benefits and fiduciary and tax risks in using directed trusts?
  • Terms and clarifications made in the UDTA to the fiduciary treatment of trust directors
  • Contrasting directed trusts with a delegation of duties
  • Using directed trusts for special needs trusts

Faculty

Flubacher, Todd
Todd A. Flubacher

Partner
Morris Nichols Arsht & Tunnell

Mr. Flubacher represents individuals in matters involving complex estate planning, asset protection, estate...  |  Read More

Brown, Cynthia
Cynthia D. M. Brown, J.D., TEP

President
Commonwealth Trust Company

Ms. Brown focuses in the areas of trust administration, estate planning and tax. Her responsibilities include oversight...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$297

Download

CPE Not Available

$297