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 […]

Article 6 of the NJ UTC (N.J.S.A. § 3B:31-46 through § 3B:31-53) provides default rules concerning the office of the trustee, many of which were already established in the existing statutes, court rules, and case law. The process of qualifying as trustee, including procedures to accept or decline the office of trustee, are set forth […]

Revocable Trusts Article 5 of the NJ UTC contains miscellaneous provisions related to revocable trusts.  Certain of these concepts (e.g., modification, termination) are covered in more detail in other areas of this article. As delineated above, for instance, this article describes the capacity of the settlor required with respect to revocable trusts and establishes that […]

Creditor’s Claims and Spendthrift and Discretionary Trusts Article 4 of the NJ UTC deals with creditor’s claims and spendthrift and discretionary trusts.  See N.J.S.A. §§ 3B:31-35 to -41. Spendthrift provisions To the extent a beneficiary’s interest is not protected by a spendthrift provision, N.J.S.A. § 3B:31-35 permits a creditor or assignee of a beneficiary to […]

PROBABLE INTENT AS TO TRUSTS The doctrine of probable intent had been codified with the probate code effective in February 2005, in N.J.S.A. § 3B:3-33.1.  As to trusts, N.J.S.A. § 3B:3-33.1(b) provides in part (emphasis added): The intention of a settlor as expressed in a trust, or of an individual as expressed in a governing […]

Reformation, Modification and Termination: New Jersey Common Law Reformation Under New Jersey common law, the power of reformation enables the court to correct a mistaken trust term or provision that frustrates the purpose of the trust.  When a mistake frustrates the purpose of a trust, a court in equity will reform the trust and bring […]

REFORMATION, MODIFICATION, INTERPRETATION, REVOCATION AND TERMINATION OF TRUSTS Reformation, Modification and Termination: NJ UTC Prior to the adoption of the NJ UTC, the law governing the modification or termination of trusts was primarily common law.  Much of that common law is now codified by the NJ UTC. For instance, the NJ UTC affirms that a […]

On March 28, 1994, Helen Weste executed a will that made three charitable bequests; left her personal property to one niece; and bequeathed the remainder of her estate in different percentages to a sister and eight nieces and nephews, including Joanne Halkovich.  She named her ex-husband John Weste executor. In 1995, Helen left the apartment […]

CREATION OF TRUSTS, INCLUDING WHETHER A VALID TRUST EXISTS This section will address the requirements to create a valid trust.  Given the fundamental nature of this topic, the survey will include at times national standards and New Jersey common law, along with the NJ UTC. Basic Requirements to Create a Trust Basic Requirements to Create […]

General Provisions and Definitions: Who is a Beneficiary Article 1 of the NJ UTC includes general provisions and definitions.  The definitions for the UTC are in N.J.S.A. § 3B:31-3.  Of particular significance are the following definitions: Beneficiary vs. Qualified Beneficiary. A trust “beneficiary” includes a person: “(1) who has any present or future interest, vested […]