Wyoming Lawyer • December 2022 • Page 34

ma ny m y other states. F or Wyo y ming g ’s self-settled dis-s -c et io na ry t ru st, th e creditor protectio cr on built into the trust is i nd ep p ende nt o f th he ty ypi p ca l sp p endthr h if ft pr p ov vi-12 si so on n. Add ditio i nally, t ru st t p ro r pe pert rty subj ect to a power of appointme nt n or withdraw wal is not availa bl e to cred--it or rs un le ss the h b en eﬁ ciar y wi th the h p ower e xe rc is es p we r of a pp th e po poi nt me nt o r wi th dr raw awal . 13 Th is p ro-vi sion n i s un iq u to Wy om o ing. g A ls l o, the b en eﬁ ﬁci ar y of v q ue f a di d scre eti on ar r y di ist tribu uti on h as n o pr p op p er ty int er es e t or r ri gh g t to force c a d istr t ibut tio n fr om t he e t ru st ; th t er e ef or o e, e t th e be ne ﬁc ia ry y ’s cre edi d to r ca c nn not t o bt ai n an a o rd er re-4 q qu ir in i g th e be b neﬁci iary to ob btain i a dis istr ibut io n. . 14 Th e W y o m i n g U T C , a n d f fe ew e r t h a n t te en o t h e r s t a t e s , p e er rm i t s s i l le en t t r u s t s , w h i c h g e n e r a l l y a ar re t r u s t s i n w h i c h t h e s e t t l o r w a i v ve es o r l i m i t s a t r u s t e e ’ ’s s d u t y t o i n f o r m t h e b e n e ﬁ c i a r ri ie s o of f t h e e x i s t e n c e o f a n d in n g a t r u s t . o t h e r i n f o r m a t i o n r e g a r d i Silent Trusts . The Th W yo mi m ng U TC , and fewe w r 5 than ten other state es, , 15 p er mi m ts silent trus sts, which g ge nera r ll l y are e trusts i n wh hich the settlor waives or lim-d ty to info ﬁ ciaries of f t h it s a trustee’ ’ s du f rm m t h he e b eneﬁ he ex xistence of f and d oth her r inf f ormation r egar d ding a trust. W oming speciﬁ Wy ﬁ cally provid d es t h hat giving notices to q uali l ﬁe ﬁ d be b ne ﬁ ﬁciaries whi h le l the h settl l or is al l ive re-q f th h e se l r and givi quir i es t h he consent of ett t lo ing notic ces to q qu al l iﬁ ﬁ ed d beneﬁ ﬁ ciaries afte f r th h e settlo l r’ ’ s d deat h is not t al ll lowe d if f the h terms of f th h e trust so s p peci f fy. 16 -Sealing of f Court Documents s . Up on c o ommence-m me ent of an a y proceeding concerning a trust, the h W yo-m mi ng U TC T p ro vide d s the trust instrument and d o th er t trust do d cuments, such as annual re p ports an nd invento-r ries, sh h al ll l b be sea l le d so t h hat th h ey are k ept pr rivat te an d a h e pu bl ic r ecord. d . 17 The sealed docu-are not part o f th -ment ts wi w ll only be avail ab a le to the court, settlor, qu ali-ﬁe ed beneﬁciaries e , and atto rney ys. s 18 Ther e e are not many y ot he r st at a es t ha t pe erm mit the sealing g o f trust docu-ment t s. De f fa ult and Mandator y Rules. . Ther re are certai in default and mandator y provisions 19 of ever y UT T C t at govern the du th uti ies and powers of a trustee, rela-ti s, and the rights and interests t ons among the trustees o f a b eneﬁci ar y. of y Th e Wyomin i g default and mandator ry p ov pr o isions have been narrowed in at least on e signiﬁ ﬁ-34 W ming Lawyer Wyo r D Dec c ember 2022 0 2 h National Co f er C m--cant aspect f from the C nf rence of Co f or m S h e mi iss s io ne rs on Unif State Laws version of th T C: t he pro vi si UT s on requiring notices to trust qu q ali-ﬁ d be b eneﬁc ﬁ iaries of irrevo v cable tr d a-ﬁe t usts i s not mand y and d m ay y b e ov by h e tr us t te . 20 Thus , tory o erri idd en e b y th t rm ms. Wy Wyoming do d es s not g rant n a leg g al rig g ht to be b neﬁcia-r ri es of irrevocabl le tr us ts t o demand d t he i de ntit t y of t th he trustee and trustee re p port ts, a s ma ay be e t he c as e in o othe ot her U UT C st tat es . R Ru ule Aga ain st Per p pe tu uit i ies. Th e typical Ru ule A p etui ti Ag ainst Pe rp t es s s ta t te es th hat cer rta t in n i nt er es ts t in p pr op o p erty must vest, if at all, within 21 1 y ears af fter the de at a h of a l if e in b ei ng the e time m that the interest d g a t th was created. o i ing Ru le A gain nst Perpe p tu it-w . 21 Th e Wy om ies allows trusts created after July y 1, 20 003 , to con-tinue for 1,00 00 y years. s 22 There is a ver y small numb ber of states that h ave no l im mit on the duration of a trust. In order for the h e xt ended pe p rpet e uities period rule to appl ly, the h t ru ust m us t ap pl y Wy W oming la w an d ha h ve a trus ste e who either e ( i) ) i s a Wy om in g re si de nt , (i ( i) ) mainta in s a pl p ac e of f b us in es e s in i Wyomi ng , or ( ii i i) ) a d--m nist mi ter s th n W yomi m ng. 23 The extend ded d per -h e trust in petu t ities pe riod d oes not ap pply to trusts holding real a pr rop er ty. 24 A dd d it i ionall y y, the 1,000-y y ear limit do oes e not apply l wh h en e the h tru ust owns an L LC, C co orp or o ation or b usiness tr us t th h at hol ld ds r ea l pr p operty. D re Di ect ed d o nl ly a fe f w othe d t ru st s. W yo mi ng and h r states es permit d directed i ecte t d trusts g iv i e a d trusts. D ir trust protector, trust adv d isor or some oth h er person th h e 2 ab b ilit l y to direct th h e trustee. e 25 For r e xamp m le l , th h e d dire ec--tion could ld be to mak ke d distribu b tions to one or mo m re e b ne ﬁ be ﬁc iari es e or to invest trust proper e ty in a sp peciﬁ ﬁ ed d manner. A dire ect c ed d trust may y be created by the h trust s t settlo l r in the h trust ins tr t umen t, b y a pe rson g iv en n t h he powe r in the h trust ins n trument, or by b a unanimous written d direction of l ﬁe f the h trust ’s ’ quali ﬁ d be b neﬁc ﬁ ia-ri i es e . 26 If the po p wer to direct aﬀects a ﬁdu uciary duty of th e trustee, the trustee e w ill be treated as an excluded ﬁduciary r wit h re spec e t to direction s and the trust pro--tector, trust advisor or r other p erso s n with the pow o er to d rect di c the h tru ust s ee e wil ll l b be a ﬁd ﬁdu d ciar a y with h respect to 7 the th eir di d re ect ctio o ns s. . 27 Other notable provisions of Wyoming trust law worth mentioning i nclude: the ability to t change a trust’s principal place of admin nistration to Wyomi m ng g with h ease; 28 allow wing for the foreclosure of post-mortem challen g ges to revocable trusts with notices provided during the settlor’s lifetime; 29 allowing fo f or 3 30 ﬂexibility in the decanting of trusts; narrowi ing the h 1 deﬁnition of a qualiﬁed beneﬁciary; 31 restricting the h appl p icat tion and construc u ti ion n o f other stat te’s laws w to 3 Wy y oming trus ts; 32 not t r eq q ui u ri ing a tru ustee t o consid der r w www .wy yomingb g ar.org org g