Your Family Trust Might Live in the Wrong State.

A lot has changed since 1971. Trust law is one of those things.

Back then, wealth meant land. Land sits where it sits. A probate court down the road from the family farm could supervise an estate without much fuss, and when questions came up about which state's law governed a trust, the answer was usually obvious because everyone involved lived within driving distance.

That world is gone. Wealthy families move between states. Trustees sit in Sioux Falls while beneficiaries live in Connecticut or London. Assets are stocks, fund interests, and intellectual property, none of which have a fixed address. Drafters deliberately situs trusts in jurisdictions like Delaware or South Dakota to capture tax benefits and stronger asset protection.

The legal framework meant to resolve disputes when these strands tangle is still the 1971 Restatement (Second) of Conflict of Laws. Built for the older world. Anchored to physical locations that no longer matter the way they used to.

Two recent developments are worth knowing about. The American Law Institute and the Uniform Law Commission both have active reform projects underway, and Harvard Law professor Robert Sitkoff currently chairs the ULC drafting committee writing a new Act on Conflict of Trust and Estate Laws.

In a paper presented at the 2026 Heckerling Institute, Sitkoff and co-author Robert Niles-Weed argued that "provoking a conflict of trust laws by drafting a trust to capture the benefits of interstate variation in law is a routine estate planning strategy," which is a polite way of saying the old rules were never designed for how modern planners actually work. The May 2026 issue of Trusts & Estates magazine led with the same warning: the framework "cries out for reform."

What Does This Mean for Families With Meaningful Wealth?

A trust drafted to be governed by South Dakota law may still be vulnerable to a forum state's public policy override if the dispute ends up in a courtroom somewhere else. The protections planners thought they had locked in are softer than they look.

Trustees, meanwhile, are making decisions under real ambiguity about which state's fiduciary standards apply to them, and that ambiguity turns into a liability question the moment a beneficiary disagrees with an investment call or a distribution.

What Trustees Can Do Now

The reform projects will take years. Trustees do not get to pause administration while that happens. A few practical moves are worth making in the meantime.

Start with a fresh read of the governing law and situs provisions in every trust on your desk. Most trustees have not done this recently. The questions worth answering: does the document pick a governing law explicitly, does it distinguish between the law governing validity and the law governing administration, and is there a mechanism to change situs if circumstances shift. Older documents in particular often have weak or silent provisions here, drafted before situs-shopping became standard practice and before most states adopted the Uniform Trust Code.

Real-world connections to the chosen jurisdiction also matter more than people assume. A trust situated in South Dakota needs more than a Sioux Falls mailing address to hold up if challenged. Where trustee meetings are held, where records are kept, whether a co-trustee has a genuine in-state presence — these are the facts a court will weigh if forced to decide whether to honor the trust's choice of law.

Track beneficiary locations as a legal variable, not just a tax one. A beneficiary's move from Florida to a state with a strong public policy tradition around trust enforcement can shift the risk profile of the trust. Most trustees update beneficiary addresses for 1099 purposes. Fewer flag the move to counsel.

Decanting may also be worth a look. Many states now allow trustees to move assets from an older trust into a new one with cleaner governing-law provisions, better trustee powers, or a more defensible situs. It is not a fit for every situation, and it carries tax and beneficiary-consent implications, but it is often the cleanest fix for trusts whose drafting predates these issues.

Whatever rules emerge from the ALI and ULC projects will reshape what good planning looks like. Documents drafted today against the old framework may not age well. The rulebook is being rewritten while the trusts written under it are still doing their work, and that gap is the part worth paying attention to as time goes on.