Monday, August 11, 2014
A failure-to-object provision included in the accounting provision of a trust instrument is common, but may carry little weight when challenged by beneficiaries. The Restatement (Third) of Trusts provides that the consent of a beneficiary must come in a form that is more than lack of an objection. This weak power of a failure-to-object clause is leading some attorneys to leave it out when drafting trust instruments.
See Charles E. Round, Jr., The Enforceability of a Trust Accounting Clause’s Failure-to-Object Provision (the Non-Judicial Settlement of Trustees’ Accounts), JD Supra, Aug. 4, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.