Time for a New Restatement

Has the time come for a new Restatement? The answer is affirmative for the law of trusts. On many topics of trust law and practice, the Third Restatement is out of date or silent. Three examples are illustrative.

The first example is the topic of the directed trust. The first U.S. statute on directed trusts was enacted in Delaware in 1986. Today more than 45 U.S. states and the District of Columbia have enacted statutes authorizing directed trusts. Some of these statutes are based on the Uniform Directed Trust Act, promulgated in 2017, and some are non-uniform. Directed trusts are widely used in modern trust practice. The Restatements of Trusts are not entirely silent on the directed trust, but they do not address the topic sufficiently, given its modern prominence. The first and second Restatements, in Section 185, addressed briefly the power of a person to control the actions of a trustee. Section 185 stated in full: “If under the terms of the trust a person has power to control the action of the trustee in certain respects, the trustee is under a duty to act in accordance with the exercise of such power, unless the attempted exercise of the power violates the terms of the trust or is a violation of a fiduciary duty to which such person is subject in the exercise of the power.” This section is broadened somewhat in Trusts Third and renumbered as Section 75. Section 75 states in full: “Except in cases covered by § 74 (involving powers of revocation and other ownership-equivalent powers), if the terms of a trust reserve to the settlor or confer upon another a power to direct or otherwise control certain conduct of the trustee, the trustee has a duty to act in accordance with the requirements of the trust provision reserving or conferring the power and to comply with any exercise of that power, unless the attempted exercise is contrary to the terms of the trust or power or the trustee knows or has reason to believe that the attempted exercise violates a fiduciary duty that the power holder owes to the beneficiaries.” The final sentence of that section’s Comment a says: “On the role of the so-called ‘trust protector,’ see final paragraphs of the Reporter’s Note to Comments b through f.” In the current era of widespread planning with directed trusts, this is not an adequate treatment of the subject of the directed trust.

The second example is the topic of trust decanting. One can find occasional judicial decisions authorizing the distribution of assets from an irrevocable trust to another trust before the rise of decanting statutes. But in the modern era, decanting typically is authorized by statute. In 1992, New York became the first U.S. state to enact a decanting statute specifically empowering a trustee to pour the assets of an irrevocable trust into another trust. Today, approximately 40 U.S. states and the District of Columbia have decanting statutes. Some of these statutes are based on the Uniform Trust Decanting Act, promulgated in 2015, and some are non-uniform. A Westlaw search of Trusts Third reveals that the word “decanting” or its inflections (such as decant, decants, decanted) appears nowhere: not in the black letter nor in the Comments nor in the Reporter’s Notes.

The third example comprises various methods for the resolution of trust disputes outside of court, such as nonjudicial settlement agreements and arbitration. Modern U.S. trust law aims to avoid court involvement in trust administration. For example, the Uniform Trust Code contains a provision (Section 111) authorizing nonjudicial settlement agreements. The UTC also facilitates such agreements by enabling the parties to the agreement to represent and bind otherwise unrepresented persons, such as trust beneficiaries who are underage, unborn, or unascertained (Sections 301–305). A further means of avoiding court involvement is the arbitration of trust disputes. States are beginning to enact statutes specifically validating an arbitration provision in the terms of a trust. Examples of such states are Arizona, Florida, Missouri, Nevada, New Hampshire, and South Dakota, all authorizing trust dispute arbitration. These topics on the resolution of trust disputes outside of court deserve sustained treatment in a new Restatement.

For more information see Thomas P Gallanis “Time for a New Restatement,” ABA Probate and Property Journal, December 30, 2025.