Directed Trusts: Panacea or Plague?Directed Trusts: Panacea or Plague?

Directed trusts have become commonplace over the last decade. There are only nine states that haven’t enacted some form of directed trust statute,¹ and among those, several are considering such legislation. Section 808 of the Uniform Trust Code (UTC) implements the concept, and the Uniform Law Commission recently empanelled a Divided Trusteeship Committee to draft a modern uniform directed trust statute and amendments to the existing provisions of the UTC.² In the leading trust jurisdictions,³ directed trust statutes are a major motivation for creating trusts and migrating existing trusts to those jurisdictions or converting them to directed trusts.

Directed trusts have become so prevalent because settlors and beneficiaries use trusts in ...