What's the Big Deal about Trusts and Trust Administration?

• Author: Seymour Goldberg
• Profession: Senior partner in the law firm of Goldberg & Goldberg, P.C., in Woodbury, New York
• Pages: 25-27

In the last decade or so, there has been a movement toward unifying state

trust laws. The movement is based in part on the extraordinary efforts

of the National Conference of Commissioners on Uniform State Laws

(NCCUSL). As a result of the efforts of the NCCUSL, the UPAIA was

drafted in 1997 and further amended thereafter.

The purpose of the comprehensive draft was to provide the states

with a model so that each state could decide whether or not to adopt the

suggested recommendations of the NCCUSL as part of the state’s own

revised trust law.

Many states have adopted versions of the UPAIA in whole or in part.

When a state adopts a version of the UPAIA, it also selects an effective date.

The UPAIA has a signicant impact on how accounting income is to be

determined by the trustee. Many duciary accounting rules are provided

for under the UPAIA. Some of the accounting rules are discretionary in

nature and others are mandatory.

If a trust provides that the income beneciary must receive income

each year, then legal problems may develop if the trustee does not know

about the UPAIA provisions that apply to the trust. When a trustee must

pay out income to a trust beneciary, then he or she must determine the

amount of income in a state that has adopted the UPAIA according to

the provisions of the UPAIA that apply to that state. Income under state

trust law and income under the Internal Revenue Code are not generally

determined in the same manner. The trustee, in order to protect himself

or herself, should ask trust counsel for advice about the UPAIA provisions

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WHAT’S THE BIG DEAL

ABOUT TRUSTS AND TRUST

ADMINISTRATION?