The Massachusetts case, Pfannenstiehl v Pfannenstiehl, 475 Mass. 105 (Aug. 4, 2016), brought national attention to the issue of whether distributions of trust income, principal, or both may be included in the parties’ divisible marital estate. In this case, Curt and Diane Pfannenstiehl were married for ten and a half years and had two children.  […]

On January 19, 2016,  the New Jersey Legislature passed, and Governor Christie signed into law, the New Jersey Uniform Trust Code (“NJ UTC”).  The new statute became effective as of July 17, 2016, and it is in Chapter 31 of Title 3B of the New Jersey statutes. Although the NJ UTC became effective on July […]

A. NJ UTC N.J.S.A. § 3B:31-8 of the NJ UTC initially states that a designation of the principal place of administration in the terms of the trust will be upheld so long as “(1) a trustee maintains a place of business located in or a trustee is a resident of the designated jurisdiction; or (2) […]

So-called “secret trusts” – also called “silent” or “quiet” trusts — are controversial in other jurisdictions.  The NJ UTC provides a compromise as to this concept, although the statute does not expressly provide for this kind of trust like statutes in other states do, such as Delaware.  12 Del. C. §§ 3303, 3339. In particular, […]

Under the NJ UTC, special needs trusts will not change in any extreme way.  However, some direction with regard to rights of creditors and the repayment of government benefits has been provided. Special needs trusts, also known as OBRA ‘93 Trusts, as defined in Subsection A of Section 3 of P.L. 2000, c.96 (C.3B:11-37), is […]

This concept is not as grounded in New Jersey law as it is in other jurisdictions.  Essentially, a directed trustee can be told to make certain investment decisions or distributions, or to take other actions in the administration of the trust.  A trust can allow a trustee to follow the direction of a third party.  […]

D. The Duty to Disclose Section 813 of the model UTC is among the most controversial provisions.  It is adopted in N.J.S.A. § 3B: 31-67.  Both the model and New Jersey versions deal with the trustee’s duties of disclosure.  The basic concept is not controversial; the level of disclosure is.  See generally Kevin D. Millard, […]

C. Remedies and Damages for Breach of Trust Remedies/Damages for Breach of Trust: Restatement and NJ Common Law Under the Second Restatement, “[t]he beneficiary of a trust can maintain a suit (a) to compel the trustee to perform his duties as trustee; (b) to enjoin the trustee from committing a breach of trust; (c) to […]

B. Trustee Defenses to Claims of Breach of Trust Trustee Defenses: New Jersey UTC Limitation of actions Perhaps the most important change in the law regarding trustee liability and defenses is the adoption by the NJ UTC of a limitation of action provision.  N.J.S.A. § 3B: 31-74.  That statute adopts specific time limits under New Jersey […]

This section addresses the standards under the NJ UTC, New Jersey common law, and the Restatement of Trusts.  Given the breadth of this area, the assessment will fall into four areas:  (A) the basic duties of the trustee for which claims may arise; (B) defenses to those claims, including limitations of actions; (C) damages and […]