Friday, September 29, 2006
Kara Blanco, an outstanding student at the Texas Tech University School of Law, has recently published her Comment entitled The Best of Both Worlds: Incorporating Provisions of the Uniform Trust Code into Texas Law, 38 Tex. Tech L. Rev. 1105 (2006).
Here is the conclusion of her article:
The Texas Legislature has hand-picked several UTC provisions to adopt into the Texas Trust Code during the past two legislative sessions. Texas has enacted so many UTC-inspired provisions that the Joint Editorial Board for Uniform Trust and Estate Laws has initiated a study to determine whether Texas should receive the designation of "substantially similar" to the UTC.
In 2003, Texas enacted both the Uniform Prudent Investor Act and the Uniform Principal and Income Act, both promulgated by the NCCUSL and closely related to the UTC. During the 2005 legislative session, Texas adopted several provisions directly from the UTC. The most significant of these included mandatory trust terms, trustees' duties to beneficiaries, grounds for judicial modification of trusts, and trusts for the benefit of pets. Though some potential problems associated with these new provisions exist, their overall impact on Texas trust law should be a positive one and should pave the way for more UTC adoptions in the future.
Though the UTC and Texas Trust Code are very similar, differences still remain, and other UTC provisions exist that could improve Texas trust law. Texas should consider adopting the more detailed UTC provision outlining specific information that trustees must provide in order to fulfill the obligation to keep qualified beneficiaries reasonably informed. In addition, Texas can increase the efficiency of trust administration and provide maximum value to beneficiaries by adding a default term allowing courts or trustees to terminate trusts if they prove too small in value to justify the administrative costs. As the NCCUSL continues to amend the UTC and respond to debates, Texas will likely benefit from future additions and amendments to the UTC.
One of the primary purposes for creating the UTC was to help states relying on the common law to compile a comprehensive codification of trust law. There was initially no reason for Texas to adopt the UTC in its entirety because Texas had a well-established Texas Trust Code. Although Texas has now adopted numerous beneficial provisions from the UTC, Texas continues to realize benefits from its own well-established and unique Texas Trust Code provisions. Texas has succeeded in obtaining the benefits the UTC offers while avoiding much of the controversy and preserving the tradition of the Texas Trust Code. In essence, Texas has truly achieved the best of both worlds.