Restatement (Third) of Trusts
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| Restatement (Third) of Trusts | |
|---|---|
| Name | Restatement (Third) of Trusts |
| Author | American Law Institute |
| Country | United States |
| Language | English |
| Subject | Trusts, fiduciary law |
| Publisher | American Law Institute |
| Pub date | 2003–2012 |
Restatement (Third) of Trusts The Restatement (Third) of Trusts is a multivolume project produced by the American Law Institute that synthesizes and reformulates United States common law on trusts. It was prepared through drafts, reporters, and advisory committees influenced by judges, academics, and practitioners from institutions such as Harvard Law School, Yale Law School, Columbia Law School, and Stanford Law School. The project has been cited by state and federal courts including the Supreme Court of the United States, the United States Court of Appeals for the Ninth Circuit, and state high courts like the New York Court of Appeals and the California Supreme Court.
Background and Development
The Restatement effort originated in the American Law Institute's broader program that produced earlier Restatements, notably the Restatement of Contracts (Second), the Restatement (Second) of Torts, and the Restatement (Second) of Contracts. Work on trust law reform accelerated after critiques of the Restatement (Second) of Trusts by scholars at University of Chicago Law School, University of Pennsylvania Law School, and commentators in journals like the Harvard Law Review and the Yale Law Journal. Key figures included reporters and advisers affiliated with University of Michigan Law School, Duke University School of Law, and the University of California, Berkeley School of Law. Drafting sessions involved practitioners from firms such as Skadden, Arps, Slate, Meagher & Flom, Cravath, Swaine & Moore, and bar associations including the American Bar Association.
Scope and Structure
The Restatement organizes trust law across topics comparable to treatises like those by Scott on Trusts and casebooks used at Georgetown University Law Center. It addresses creation, modification, interpretation, administration, fiduciary duties, remedies, and termination, and draws on statutory frameworks including the Uniform Trust Code and doctrines from jurisdictions like Delaware Chancery Court, Texas Supreme Court, and Florida Supreme Court. The project was released in parts and supplements, with chapters intended for citation by courts such as the Massachusetts Supreme Judicial Court and appellate tribunals like the Eleventh Circuit Court of Appeals.
Key Doctrinal Changes from Restatement (Second)
Compared with the prior Restatement, the Third introduced shifts influenced by cases from the Supreme Court of California, decisions in New York State, and scholarship from scholars at University of Chicago, NYU School of Law, and Columbia University. Changes included reworking the duty of loyalty in light of precedents such as rulings from the Delaware Supreme Court and statutes enacted by legislatures like those of Texas and Florida. The Third also reconfigured principles on spendthrift trusts, modification doctrines shaped by the Uniform Trust Code promulgated by the Uniform Law Commission, and rules about charitable trusts informed by cases in the United States District Court for the Southern District of New York.
Major Provisions and Principles
Prominent provisions cover trustee duties, standards of prudence, investment and portfolio management reflecting principles from decisions in Second Circuit and Third Circuit jurisprudence, delegation and co-trustee coordination influenced by opinions from the Illinois Supreme Court, and equitable remedies that courts such as the Supreme Court of Texas have considered. Sections treat trustee power to invade principal, cy pres doctrine with precedents from the California Supreme Court, modification and termination reflecting Alabama and New Jersey jurisprudence, and fiduciary accounting influenced by practices at firms like PricewaterhouseCoopers and Deloitte advising trustees.
Reception and Influence in Jurisprudence
Courts across the United States—ranging from the Minnesota Supreme Court to the Ninth Circuit Court of Appeals—have cited the Restatement in opinions on trust interpretation, trustee breach, and equitable remedies. Law reviews including the Stanford Law Review, Columbia Law Review, and Michigan Law Review have analyzed its theoretical basis, and bar groups such as the American Bar Association Section of Real Property, Trust and Estate Law have debated adoption. International commentators in forums linked to institutions like Oxford University and University of Cambridge have compared the Restatement to trust principles in England and Wales and common law jurisdictions including Canada and Australia.
Criticisms and Controversies
Critiques emerged from scholars at Harvard Law School, Yale Law School, and NYU School of Law who argued the Third diverged from precedent or introduced policy choices better left to legislatures like those of California and New York. Practitioners at firms such as Kirkland & Ellis and commentators in the New York Times and Wall Street Journal raised concerns about clarity on fiduciary conflicts, trustee investment discretion, and the interaction with the Uniform Trust Code. Some state supreme courts, including panels in Ohio and Oregon, have questioned reliance on Restatement propositions when statutory schemes differ.
Adoption and Use in Practice
Many state courts and practitioners in jurisdictions like Delaware, New York, California, and Florida routinely consult the Restatement for persuasive authority in trust litigation, estate planning, and fiduciary disputes. Estate planners trained at University of Virginia School of Law and Northwestern Pritzker School of Law reference its rules when drafting instruments and advising clients, while trusts and estates litigators cite it in briefs before courts such as the Supreme Court of the United States and state appellate courts. Bar education programs hosted by organizations like the American Law Institute and the American Bar Association incorporate the Restatement into continuing legal education.