There is a central tension in the law of trusts between the rights of the deceased settlor and the rights of living beneficiaries. In many respects, the position of the settlor is paramount. The settlor establishes the terms of the trust and has the power to determine the extent of the beneficiaries’ interests and the extent of their control. Yet, only the beneficiaries hold any ownership interest in the trust. This article analyzes the constant tension, its evolution and how New York courts have moved away from their rigid beginnings, which disallowed all deviation from dispositive trust terms, toward a more liberal approach to trust modification and reformation.
Historic Principles
Historically, courts regarded the settlor’s intent as the guide to trust administration.1 The general rule was that the settlor alone determined the terms of the trust that would best serve that settlor’s beneficiaries.2 However, a settlor cannot address or even attempt to anticipate potential changing circumstances. As a result, there has been a move toward loosening the grip of “dead hand” control.
