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The 1971 Restatement (Second) of Conflict of Laws has become increasingly problematic in resolving conflicts-of-trust law. Its framework is anchored in physical locations, such as land, the probate court or the situs of tangible assets. Today’s trust environment is unmoored from these historic anchors. In their article, “Trusts Without Borders,” p. 28, Robert B. Niles-Weed and Robert H. Sitkoff explain how the rules we’ve been using were drafted for a bygone era and need to be revised. For example, interstate mobility has increased significantly among wealthy families, and movable financial assets have replaced real property as the dominant form of wealth. The current situation cries out for reform, and, as the authors note in their article, the American Law Institute and the Uniform Law Commission have major projects underway to rewrite the rules for resolving trust conflicts.
Change is also underway when it comes to the diversification of trust assets. In the past, trustees defined diversification solely in terms of public markets, but that framework no longer reflects how the modern economy operates. In “A Modern Trustee’s Guide to Private Market Participation,” p. 43, Audrey J. Skiera and Gretchen R. Spreitzer note that today, a substantial share of business formation, growth and capital formation occurs outside public markets. Their article explains when private markets are appropriate for a well-constructed trust portfolio.
Rounding out our Fiduciary Professions Committee Report are articles providing an update on recent court rulings and explaining how using identified parts, portions and divisions of clients’ trusts can help keep them flexible.
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