In recent years trusts have been used more frequently, both in family estate planning as well as commercially in transactions. Along with the greater use of trusts came the understanding that trust laws were varied greatly from state to state and were considered thin at best. In an attempt to codify generally practiced and accepted common law principles regarding trusts, the National Conference of Commissioners on Uniform State Laws created the Uniform Trust Code (UTC) in regards to the creation of a uniform code for all fifty states.
Most law governing the regulation of creation and administrative duties of trusts in the United States have become statutory at the level of the state. The Uniform Trust generally involves three parties in its creation as well as its regulation of administrative duties. The first is the grantor or settler who is the individual that has created the trust; a trustee who oversees and manages the trust and its assets; and a beneficiary who, much like the title suggests, receives the benefit of the administrated trust.
The Grantor of a trust is simply the individual who has decided to create the trust by making a trust agreement which outlines the terms and conditions of the trust. Generally such a trust is revocable in that the Grantor retains the ability alter, change or revoke the trust at any time unless the terms of the trust specifically mentions otherwise.
The Trustee is the person or persons who manage the trust and all of the duties that are required to make the trust function properly. Unlike the Grantor position, a trust may have only one trustee or multiple trustees. This position is responsible collect trust assets, pay expenses and enforce or defend claims in its interests.
The Beneficiary as defined by the Uniform Trust Code is the person that has a present or future beneficial interest in the trust. These individuals are the holders of equitable title of trust assets and receive all the benefits of the trust property. The Beneficiary is also subject of the Trusteeâ€™s legal title ownership as well as control under the terms and conditions of the trust agreement dictated by that of the Grantor.
To date, twenty states have adopted some substantive form of the Uniform Trust Code and executed the laws as they see fit. Despite the fact that an attempt has been made to make all participating states uniform in regards to the handling of these trusts, each state has adapted the law as they see fit. The three most recent states that have tried to pass this new bill would also require a bond from the trustee to regulate their duties if the court decides on the necessity of protecting the interests of the Beneficiary. The court would also be granted the ability to set the price of the bond, the terms of liability and alter or terminate the bond at any time. Only Arizona has passed and enacted this bill, while Connecticut and Oklahoma defeated it.