Another rejection of the intent-defeating, sole-benefit-of-the-beneficiaries principle, the policy centerpiece of the Uniform Trust Code

Charles E. Rounds, Jr.
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In §6.1.2 of Loring and Rounds: A Trustee’s Handbook (2016), the authors report on the ongoing academic debate between Prof. John H. Langbein and Prof. Jeffrey A. Cooper over the merits of the sole-benefit-of the-beneficiaries principle (the “principle”), which is a central policy innovation of the Uniform Trust Code. See UTC §404. Prof. Langbein is the philosophical godfather of the principle. Prof. Jeffrey Cooper has strong public policy reservations, which he has outlined in several law review articles. Georgia, Iowa, Massachusetts and New Hampshire have effectively sided with Prof. Cooper. See their versions of the UTC. On May 18, 2016, referencing Loring and Rounds: A Trustee’s Handbook, specifically the aforementioned §6.1.2, Wyoming’s Supreme Court weighed in with an unambiguous judicial "no thank you" to the plaintiff’s invitation to endorse the principle: “…[The plaintiff] ...bases its breach of fiduciary duties claim on the premise that a trustee has a singular obligation and that obligation is to act solely in the best interests of the beneficiaries. This premise is flawed because it ignores the trustee’s co-equal obligation to carry out the trust according to its terms and to carry out the settlor’s intentions.” See Shriners Hospitals for Children v. First Northern Bank of Wyoming, In the Supreme Court, State of Wyoming, S-15-0238, S-15-0239 (May 18, 2016). The relevant portions of §6.1.2 of the Handbook are reproduced below.

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