Seven states Alabama, California, North Carolina, Washington, Virginia, New Mexico and Colorado have adopted the UTDA, according to the Uniform Law Commission's website.
A number of states with statutes that predate the UTDA are also considering changes to their statutory decanting schemes to line them up with the UTDA, Bloostein reports.
In Massachusetts, the UTDA would be incorporated into the Massachusetts Uniform Trust Code, inserted as Article 9, which had been reserved.
If it was going to recommend changes to the UTDA, the reviewing subcommittee decided it would need to have a good reason.
In the absence of the UTDA, risks like the ones taken by the trustees in Kraft and Ferri are "not really open to every citizen of Massachusetts" but are reserved for the "uber wealthy," Younger notes.
Perhaps the most important requirement the UTDA would usher in is the need for a trustee to provide notice of his intent to decant to all "qualified beneficiaries" a term that the statute defines along with the settlor, if living.
Langa says that the definition of "qualified beneficiary" under the MUTC had been somewhat unclear, and that an added bonus of adoption of the UTDA would be the fix it would bring to that definition.
One provision of the UTDA that drew praise from attorneys is Section 912, which would allow for the severance of a first trust into multiple second trusts with substantially similar benefits in the aggregate.
If the UTDA becomes law, a fiduciary would still be able to "decant in accordance with common law principles," the reviewing subcommittee's report stresses.
As explained in what would be Section 903 of the new law, adopting the UTDA will not disturb the common-law power to decant, which attorneys says is important in scenarios like the one in Ferri.
In addition, the MBA committee's report notes that under the UTDA, one cannot decant an older trust eligible for the generation-skipping transfer tax exemption into a new trust without potentially losing that valuable exemption.
The UTDA contains several specific limitations on the exercise of the decanting power with respect to charitable trusts, but the subcommittee determined those could be eliminated, believing that granting the AG the rights of a qualified beneficiary, "together with all of the other provisions of the Act and well-developed law regarding charitable trusts, gives the Attorney General sufficient powers to protect and enforce charitable interests in a decanting."