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by Doug Stanley

In the following months, your estate planning lawyer may be contacting you about a new change in Missouri law. Missouri, along with many other states, has enacted a new set of rules pertaining to the administration of trusts known as the “Missouri Uniform Trust Code.” Estate planning experts throughout the United States have been working over the last few years on a uniform code of trust rules. Missouri enacted this uniform code, with some adjustments.

Why this new code? Over time, the revocable trust has gradually replaced the will as the primary estate-planning instrument used to dispose of one’s assets at death. Missouri had developed a detailed set of written rules to deal with the administration of wills, but the rules for administering trusts was a hodgepodge of statutes, cases and treatises. A comprehensive set of rules was needed.

The new code is a default set of rules analyzed and drafted by experts in the field that are intended to cover most situations. Some of these key points are:

(1)A trustee of a trust has an obligation to act in the best interest of the beneficiaries. The new law provides for a detailed set of duties that the trustee must perform.

(2)The new law provides a guide for how trust disputes can be settled out of court.

(3)The new code makes it easier for courts (and in some cases the beneficiaries of the trust) to modify terms of a trust when there has been a change in circumstances.

(4) The statute of limitations (the time period a trust beneficiary can file an objection) is shorter and more clearly defined. This will give trustees more comfort in knowing that their decisions will have more finality.

The new code goes into effect on January 1, 2005, however, it will generally not override the terms of an irrevocable trust in existence on January 1, 2005 if those terms are contrary to the new code. Examples of irrevocable trusts include insurance trusts, personal residence trusts, as well as marital trusts and credit shelter trusts created after a person dies.

Because revocable trusts by their nature can typically be changed by the grantor at any time prior to the grantor’s death, if the grantor is still alive on January 1, 2005, then this new code will apply to the revocable trust because it is still revocable at that time. If you have an existing revocable trust, it will be important to discuss with your attorney how these new rules will impact your trust. Even though the code is a default set of rules that are intended to cover most trusts, most of these rules can be overridden by the terms of the revocable trust agreement. However, that will require an analysis of your existing trust instrument to decide which rules should apply in your estate plan.

Douglas J. Stanley is an estate planning attorney with Bryan Cave LLP. He has experience in individual estate administration, closely held business succession planning and tax financial planning. He also has experience in business sales, purchases and other corporate and partnership taxation issues.