After years of operating exclusively under laws drafted on the state level, New Jersey adopted much of the Universal Trust Code (UTC) in 2016. The UTC is a set of uniformed proposed statutes that impact trusts formation.
When you have questions about Manalapan Township Uniform Trust Code issues, now is the time to ask. An experienced trust attorney could help you understand how the current laws might change your trust, as well as how the state has chosen to deviate from parts of the UTC.
What is the UTC?
The UTC is a model law. It is a nonbinding series of statutes designed to be voluntarily adopted by state legislatures across the country.
There is a belief that a standardized approach to trusts would improve the ability of this estate planning tool to substitute for a traditional last will and testament. However, conflicting trust law between states has previously caused issues with trusts that hold assets across state lines. To date, most states have adopted the UTC partially or in full, including New Jersey and Manalapan Township.
Adopting the UTC in New Jersey
The adoption of the Uniform Trust Code in Manalapan Township made major revisions to the laws regarding trusts. However, two changes are especially notable. These changes involved rules of trust modification and directed trusts.
Trust modification changed under the UTC. Creators of trusts now have the option to modify an irrevocable trust under limited circumstances. This is a valuable new option, given that trust creators have long been locked into their original decisions regarding their trust and its beneficiaries.
Until this change, the law did not allow for directed trusts. With the adoption of the UTC, directed trusts are now an option. A directed trust gives a third-party adviser the power to invest the assets of a trust. Traditionally, this power rested only with the trustee. This is a useful option for trusts where the creator would prefer one party to have the power to invest trust assets and a different party to act as trustee.
Departures from the UTC
Manalapan Township has not adopted the full Uniform Trust Code. Like other states, this jurisdiction implemented large sections of the UTC while leaving long-standing laws in place regarding some issues.
The most prominent part of the UTC that the state did not adopt relates to the removal of trustees. According to current law, trustees can be removed for cause. This includes removal based on neglect, refusal to provide an accounting, embezzlement, waste, incapacitation, or hindering the administration of the trust. The definition of cause is more narrow than the UTC, which also recognizes removal based on a substantial change in circumstances or failure to effectively administer the trust.
Talk to an Attorney About Manalapan Township Uniform Trust Code
Trust law is complicated, as are the terms of the UTC. The best way to ensure that your estate is protected is by working with an attorney that understands common Manalapan Township Uniform Trust Code issues. Reach out right away to learn about how an attorney could help.