Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, May 14, 2024

Uniform Laws Update - Conflict of Laws in Trusts and Estates

Estate-planning-967badd135bb43889abcea181ddaf72cThe Uniform Laws Update in Probate & Property highlights the evolving landscape of estate planning, which has shifted from primarily local to encompassing multiple jurisdictions due to increased mobility, changing wealth structures, and evolving state laws. With families relocating frequently and wealth being more fluid, estate plans often need to consider laws from various states. Moreover, the emergence of trust-friendly legislation in certain states has led to the strategic selection of trust jurisdictions, adding complexity to the choice of governing laws. Consequently, conflicts of laws have become more common, as litigators seek favorable forums for resolving disputes involving trusts with connections to multiple states.

Section 107 of the Uniform Trust Code delineates guidelines for resolving conflicts within trust matters, emphasizing that the determination of a trust's terms relies on the law of the designated jurisdiction, unless contrary to a strong public policy of the jurisdiction most relevant to the matter or in the absence of such designation, the law of the jurisdiction with the most significant relationship to the issue prevails. However, phrases like "strong public policy" remain ambiguous, leaving courts to interpret these terms. Meanwhile, the Restatement (Second) of Conflict of Laws offers more defined rules, though its antiquated framework fails to address modern complexities, such as the rise of trusts governed by laws from distant jurisdictions. This complexity extends beyond trusts to the realm of wills and probate procedures, prompting initiatives like the drafting of the Restatement (Third) of Conflict of Laws by the American Law Institute (ALI) and the Uniform Law Commission's (ULC) creation of a new uniform act on conflict of laws in trusts and estates. Collaboration between ALI and ULC aims to synchronize efforts and ensure coherence in legal outcomes, which is crucial given the significant assets held in trusts and the extensive time estate planners invest in navigating jurisdictional laws.

David Lieberman, a partner at Levin Schreder & Cary in Chicago, serves as the ABA Advisor for the project, facilitating communication between the drafting committee and American Bar Association (ABA) members. The drafting committee prioritizes respecting donors' autonomy in selecting governing laws while endeavoring to simplify conflict laws by minimizing distinctions between types of property and trusts and streamlining the application of laws in construction and interpretation matters. Nonetheless, the complexity of the subject necessitates thorough deliberation, with both ALI and ULC welcoming stakeholder input as they strive to produce comprehensive and impactful legal frameworks that address the intricacies of today's legal landscape effectively.

For more information see Benjamin Orzeske “Uniform Laws Update - Conflict of Laws in Trusts and Estates”, American Bar Association Probate & Property, May/June 2024.


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