Directed trusts have become increasingly popular with clients because of their flexibility. A settlor can direct that one individual, other than the trustee, has certain duties, and parse out responsibilities (and liabilities) as they see fit. This is attractive to some settlors, especially in the context of a closely held business and succession planning. This increasing popularity highlights the need for New York to enact a directed trust statute.
In a prior column,1 we addressed directed trusts in the broader context of the Uniform Trust Code (UTC) and whether New York should adopt the UTC. For several years, various organizations at the request of the New York State Legislative Advisory Committee on EPTL and SCPA have been considering whether to recommend the adoption of a uniform trust code for New York. Since that last article, the committee has sent its Sixth Report to the New York State Legislature. The Sixth Report recommends that the Legislature enact the UTC, as modified, as a new Article 7-A of the Estate Powers and Trusts Law, and is currently under review.
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