Schwartzel: Was It Wise to Try to Implement Trust Law Reforms Through UPMIFA?

C. Boone Schwartzel has posted Was It Wise to Try to Implement Trust Law Reforms Through the Uniform Prudent Management of Institutional Funds Act?, 14 Estate Planning & Community Property Law Journal 179 (2021). Here is the abstract:

This article explores two main topics. First, it generally discusses the Uniform Prudent Management of Institutional Funds Act’s new definitions and expanded scope, and then examines whether under the Act, as a matter of law, restrictions imposed in a gift instrument between a “donor” institution and a second, affiliated institution it controls must be respected and enforced (and the fund assets treated as “donor restricted”) even though generally accepted accounting principles may take a different view.

Second, the article examines UPMIFA’s new statutory remedies that empower courts and charitable institutions to modify much more easily a donor’s outdated or “wasteful” restrictions. UPMIFA’s remedies are loosely patterned after controversial reforms of trust law’s equitable deviation and cy pres doctrines, as promulgated in the Uniform Trust Code and the Restatement (Third) of Trusts, that loosen their historical ties to the donor’s original charitable intent and virtually eliminate cy pres’ “general charitable intent” requirement. There are important public policy issues and constitutional law questions concerning the wisdom and validity of these reformed trust law remedies, and especially as implemented in UPMIFA.

Lloyd Mayer