Law Firms as Trust Directors

Authors

• Raymond C. O’Brien

Abstract

The practice of permitting a third party, other than a settlor or a trustee, to give guidance to the trustee over some aspect of trust management reflects the trend of granting settlors increasing control over their transfers of wealth. In decades past, a few states enacted legislation permitting what is known as directed trusts, but in 2017, the Uniform Directed Trust Act was promulgated, seeking to provide a modicum of uniformity among the states, as wealth is now increasingly both interstate and international. Using the Uniform Directed Trust Act as a template, this Article discusses issues pertinent to directed trusts, such as the relative power of the parties involved, their responsibilities to all parties, and the fiduciary duties owed and to whom. But the focus of this Article is to discuss the benefits derived from choosing a law firm as the person to give direction, the trust director in a directed trust. Such an arrangement may bolster a law firm’s profitability, building upon an existing fiduciary relationship, while mindful of situs, drafting of the pertinent trust provisions, and considerations relevant to the powers a law firm may use advantageously. Working in tandem with a corporate wealth manager as the trustee, the law firm, as an entity better known to the settlor, is better positioned to perform administrative tasks associated with investment decisions, distributions to beneficiaries, and modification of the initial trust purpose.

Recommended Citation

O’Brien, Raymond C. (2025) "Law Firms as Trust Directors," ACTEC Law Journal: Vol. 51: No. 1, Article 3.
Available at: https://scholarlycommons.law.hofstra.edu/acteclj/vol51/iss1/3