Call a tow truck and an ambulance: The proposed Illinois adaptation of the Uniform Trust Code is dangerous at any speed.
Imagine driving this: Trusts no longer need to benefit their beneficiaries!
Executive Summary: The proposed adoption of the Uniform Trust Code to Illinois deletes that Code’s provision that “A trust and its terms must be for the benefit of the beneficiaries.” This provision is simply foundational. It should be restored to the proposed act for any or all of the following reasons:
First, providing a benefit to the beneficiary is a basic premise of trusts. Afterall, that’s why they call the person a “beneficiary”! If the beneficiary doesn’t benefit, you no longer have a trust.
Second, in conjunction with manifesting the grantor’s intent, the provision is an indispensable factor for decision-making. In other words, the core telos of trusts is to enhance the beneficiary through the vision of the grantor.
Third, without it, other provisions of the Code become unworkable. Specifically, Section 412 relies on this basic premise to guide modification of the trust because of either impracticality or unanticipated changes in circumstances. Changes to the trust must necessarily heed the benefits for the beneficiary.
Fourth, without this provision, the proposed statute grossly over-defers to old Illinois policy to favor the grantor in dispute with the beneficiary. Better to acknowledge that both are factors. If the stale policy continues, simply add that the wishes of the grantor should be preferred.
Fifth, the proposal is likely to strengthen trustees’ ability to ignore beneficiaries’ interests with impunity. If beneficiaries don’t matter, they will be abused.
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