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The Uniform Trust Code, and whether "common-law / constitutional" trusts escape it

Research + doctrine note (2026-07-14), grounded in primary statute and IRS text. Answers the question: is the trust code a limiting factor on Red River / pure / common-law trusts, and does framing a trust as "common law" or "constitutional / under God" put it outside the statutory net?

Terminology first. There is no "Universal Trust Code." The instrument is the Uniform Trust Code (UTC) — a model act drafted by the Uniform Law Commission (2000, amended since), enacted in 36 of the 51 jurisdictions this project tracks (data/trust-statutes.json; see the /statutes page). Non-UTC states (CA, NY, TX, FL-as-its-own-code, etc.) have their own comprehensive trust statutes. The analysis below is about the UTC but the conclusions hold under every state's code.

1. The UTC is mostly DEFAULT law, with a MANDATORY floor

This is the crux. The UTC does not dictate how your trust must read. UTC §105 makes the code's rules default rules — "the terms of a trust prevail over any provision of this [Code]" — except for an enumerated list of mandatory rules the instrument cannot override. Virginia's enactment (§64.2-703(B)) states the mandatory core; a trust term cannot waive:

  1. the requirements for creating a trust;
  2. the trustee's duty to act in good faith and in accordance with the trust's terms and purposes;
  3. the requirement that a trust and its terms be for the benefit of the beneficiaries, with a purpose that is lawful, not contrary to public policy, and possible to achieve;
  4. the power of the court to modify or terminate a trust and to adjust unreasonable trustee compensation;
  5. the effect of a spendthrift provision and the rights of certain creditors to reach the trust;
  6. the court's power over bond requirements;
  7. limits on the effect of an exculpatory term;
  8. the rights of a person other than a trustee or beneficiary;
  9. periods of limitation for judicial proceedings;
  10. the court's power "to take such action and exercise such jurisdiction as may be necessary in the interests of justice."

Everything else — administration, notice, distribution standards, trustee powers — you may draft around. So the UTC is a floor plus a menu, not a cage.

2. The UTC does NOT abolish common-law trusts — it supplements them

The kernel of truth the movement seizes on is real and in the statute. UTC §106 (Va. §64.2-704), verbatim:

"The common law of trusts and principles of equity supplement this chapter, except to the extent modified by this chapter or another statute of the Commonwealth."

So a "common-law trust" is not abolished by codification. The right to create a trust by private agreement survives; the code fills gaps and sets the mandatory floor. A promoter who says "the statute didn't repeal common-law trusts" is, on that narrow point, correct.

3. Do Red River / pure / spendthrift trusts "comply"? Do they have to?

As a matter of trust validity — they can comply, and mostly do. A Red River-style irrevocable, non-grantor, complex, discretionary spendthrift trust (the structure the builder in this app assembles) satisfies the §105(b) mandatory requirements on its face: it is created with the required formalities, it names beneficiaries and a lawful purpose, and it imposes a good-faith fiduciary duty on the trustee. Nothing in the UTC forbids irrevocability, discretion, or a spendthrift clause — the code expressly contemplates all three. They "have to" comply only with the §105(b) mandatory list; the rest they draft around. That is ordinary and permitted.

The problems are not trust-law problems. Where these trusts fail is on two axes the UTC has nothing to do with:

4. The "common-law / constitutional / under-God trust" theory

The framing in the question — trusts "under God, like the Constitution" — is the movement's natural-law argument, and it runs like this: just as God-given / natural rights pre-exist and limit the Constitution (the Constitution secures rights it did not grant), a common-law trust arising from the constitutional right of contract (U.S. Const. art. I §10, the Contracts Clause) pre-exists and sits outside the statutory trust codes; the legislature can regulate its own statutory creations but not a private trust formed under a right that precedes the statute.

What is right about it. §106 does preserve common-law trusts. The right to contract and to create a private trust is real and constitutionally grounded. The UTC is largely default law. To that extent the intuition — "the code is not the source of my trust and cannot be its master" — has a genuine footing.

Where it fails.

  1. The mandatory floor still binds. §105(b) applies to every trust the state's courts will recognize, common-law pedigree or not. A "constitutional trust" that violates public policy, denies beneficiaries the benefit requirement, or purports to oust the courts is void on the same terms as any other. The Contracts Clause does not exempt a private agreement from generally-applicable law.
  2. "Common-law trust" as a tax category does not exist. The IRS states flatly: "Contrary to the claims of promoters, 'common law trusts' no longer exist since all states now have statutes relating to the creation and operation of trusts." And "unincorporated business organization" (UBO) is described as "a term used by trust promoters … to disguise the fact that it is a trust," not a term of the Code. The label buys nothing.
  3. Different sovereigns, not a hierarchy. The natural-law analogy assumes one ladder (God → Constitution → statute) that a trust can climb above. But taxation is a separate federal power, and creditor rights are separate state powers, neither of which is the UTC. Escaping (or supplementing) the trust code does nothing to escape the tax code or creditor law — they never depended on the UTC in the first place.
  4. Substance over form / sham-trust doctrine. Courts and the IRS disregard a trust operated as the settlor's alter ego regardless of how it is labeled or which body of law it invokes.

5. So — is the UTC the "limiting factor"?

No — and that is the useful correction. In the de facto statutory sense the UTC is close to the opposite of a limiting factor: it is mostly default law, it yields to the trust instrument, and it preserves (does not abolish) the common-law trust (§106). Its only hard limit is the short §105(b) mandatory list — good faith, benefit of beneficiaries, lawful purpose, court access, creditor rules — none of which a legitimately-intended trust chafes against.

The limits these trusts actually run into come from outside the trust code entirely: the Internal Revenue Code (a separate federal sovereign) and, for asset-protection claims, creditor law and the mandatory spendthrift rule. The movement is therefore half right and half wrong in a specific way: right that a statutory trust code does not cage a privately-created trust; wrong that this buys tax or creditor immunity — because those limits were never the trust code's to impose or to lift. Compliance with (or supplementation of) the UTC is simply the wrong axis on which to seek that relief.

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