Legislative Update: Massachusetts Uniform Trust Code (“MUTC”)

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Authors: Matthew R. Hillery, Esq., Edwards Angell Palmer & Dodge LLP
Suma V. Nair, Esq., Goulston & Storrs, P.C.

In 2000, the Uniform Law Commission promulgated a Uniform Trust Code for consideration by the states. In 2005, an Ad Hoc Committee of Massachusetts attorneys convened to review the Uniform Trust Code in detail. That Committee has described the Uniform Trust Code as an attempt to codify the rules relating to trusts comprehensively and uniformly and in some cases to include innovative provisions thought to improve upon the common law.

In reviewing the Uniform Trust Code, the Ad Hoc Committee (1) evaluated current Massachusetts law, preserving it where the committee thought it was superior to the Uniform Code and (2) in some cases, rebalanced the power between the beneficiaries, the trustee and the settlor where the Committee disagreed with the balance struck in the Uniform Trust Code. The eventual product of the Ad Hoc Committee was the MUTC. The MUTC would concentrate in one place the Massachusetts statutory law of trusts, which should make it easier to know the law. The MUTC would supersede the Massachusetts common law of trusts to the extent that they are inconsistent.

The Steering Committee of the Boston Bar Association’s Trusts and Estates Section has voted to support enactment of the proposed Massachusetts Uniform Trust Code (“MUTC”). The Steering Committee’s vote followed an approximately two month review period that included an open discussion meeting on January 22, 2010, in which all members of the Section were invited to participate. Most of the members of the Ad Hoc Committee that drafted the MUTC participated in the January 22 discussion. While a majority of the members (15) of the Steering Committee voted to support enactment of the MUTC, a minority of the members (3) voted not to support enactment of the MUTC at this time. A summary of each of the majority view and the minority view follows:

Majority View. The Uniform Trust Code, with state specific modifications, has been adopted by 23 states to date, including New Hampshire, Vermont and Maine. As with any uniform statute, a primary purpose of the Uniform Trust Code is to make the administration of trusts more uniform among the states, a reasonable goal in the 21st Century given that trust law in most states, including Massachusetts, is based largely on case law. Adoption of the MUTC will be seen favorably as moving Massachusetts into the modern era of trust law and administration. The Ad Hoc Committee that drafted the MUTC was comprised of well-regarded members of the Massachusetts Bar who debated each section of the uniform statute. The result of that debate, which included whether or not the MUTC is even needed, is a statute that will (in the words of the Ad Hoc Committee) “simplify and make more accessible the law of trusts in Massachusetts while leaving our vast common law on the subject largely intact.” The Committee’s Report includes an extensive introductory section and comments on each section of the proposed MUTC. The MUTC has been endorsed without any recommended changes by the Probate Section of the Massachusetts Bar Association and by the Massachusetts Bankers Association.

Minority View. A small group of the Steering Committee voted against approval of the draft MUTC at this time. The main concern was that the act is moving forward too quickly and that its possible effects had not been fully considered by members of the Section and of the bar. The act explicitly changes many long-standing rules that have been relied on in the formation and administration of trusts in Massachusetts (for instance, by changing the current default rule requiring unanimity among trustees) and introduces new rules and requirements not previously seen. Most of these changes are applied to all trusts, regardless of when created or made irrevocable. Furthermore, some members felt that the Committee Report should be expanded to explain more fully the rationale behind the proposed changes to Massachusetts law and to the model UTC.

The Steering Committee has already voted to approve the draft MUTC, but the legislative process has only just begun. We urge those of our members who have not yet had the opportunity to review the draft act and committee report to do so now. We welcome your comments.