State-by-State Uniform Trust Code Adoption in 2026: Why It Matters for Inherited IRAs, See-Through Trusts, and the 10-Year Rule

The paperwork question that decides how a $1.4M inherited IRA gets taxed over the next decade is not a federal tax question. It is a state trust-law question, and the answer depends on whether the state that governs your trust follows the Uniform Trust Code or one of the thirteen distinct common-law-descended codes that still exist alongside it.

Federal law under IRC §401(a)(9)(H) sets the outer deadline — most non-spouse beneficiaries have to empty an inherited IRA within ten years of the account owner's death.^[1] Treas. Reg. §1.401(a)(9)-4(f), as amended by TD 10001 in July 2024, sets the qualification rules that let a trust be treated as the individual beneficiary for RMD purposes.^[2] Both of those rules are uniform across the country. But the state trust code determines whether the trustee can adjust distribution timing, whether beneficiaries can force a change of trustee, whether creditors can reach a distribution mid-decade, and whether the trust can be modified after the account owner is gone. Those state-law variables are the difference between a trust that saves $180,000 in combined federal and state tax over the 10-year window and a trust that costs $80,000 more than a direct distribution would have.

The Uniform Trust Code, drafted by the Uniform Law Commission in 2000 and substantially revised in 2010, was the first serious attempt to standardize U.S. trust law.^[3] As of August 2026, the ULC enactment tracker shows 36 states plus the District of Columbia have adopted a form of the UTC. That leaves 14 jurisdictions — Alaska, California, Delaware, Georgia, Idaho, Indiana, Iowa, Louisiana, Nevada, New York, Oklahoma, Rhode Island, South Dakota, and Texas — operating under state-specific common-law-based trust codes. Some of those holdouts (Delaware, South Dakota, Nevada, Alaska) are deliberate — they compete for trust situs and would lose their competitive edge by adopting the UTC verbatim. Others (California, New York, Texas, Georgia) are non-adopters by inertia — their existing code works, the political appetite to codify a new statute is limited, and the effect on ordinary trusts is small.

This is the field guide. It covers the UTC's structure, the exact 36-state-plus-DC adoption list, the section-by-section differences that matter for a see-through trust holding an inherited IRA, the four most common non-UTC states people affirmatively pick as governing-law jurisdictions, and the drafting checklist a retiree with a see-through trust should walk through before the second half of 2026 gets away from them. When you want to run the after-tax math on any specific inherited-IRA scenario, the CalcLeap retirement calculator and the 401(k) withdrawal calculator handle the year-by-year drawdown arithmetic.

What the Uniform Trust Code actually is

The UTC is a 12-article model statute. It covers the same subject matter every state's trust code has always covered — trust creation, trustee powers and duties, beneficiary rights, modification, termination, revocation — but in a shared vocabulary. The ULC drafted it between 1994 and 2000, published the final text in 2000, and revised it materially in 2003, 2004, 2005, and 2010.^[3] Every enacting state modifies it. No state has enacted it verbatim, and the standing joke among trust-and-estates practitioners is that "the UTC is a menu, not a recipe."

The four articles that matter most for a see-through trust holding an inherited IRA are:

• Article 4 — Creation, Validity, Modification, and Termination. UTC §§411, 412, 414, and 415 govern how a trust can be modified or terminated after the settlor's death. Section 411 permits non-judicial modification with the consent of all qualified beneficiaries. Section 412 permits court modification when unanticipated circumstances would substantially impair the trust's purpose. Section 414 permits modification of small trusts under $50,000 and modification "to achieve the settlor's tax objectives" without any dollar cap. Section 415 permits reformation to correct scrivener's errors.
• Article 5 — Creditor's Claims; Spendthrift and Discretionary Trusts. UTC §502 is the spendthrift provision — a beneficiary's interest is protected from creditors and voluntary transfer if the trust instrument uses spendthrift language. UTC §§503-504 carve out narrow exceptions for child support, spousal support, and certain government claims. UTC §505 governs the creditor's ability to reach a self-settled trust — the source of the domestic-asset-protection-trust distinction that Delaware, Nevada, Alaska, and South Dakota built entire industries around.
• Article 7 — Office of Trustee. UTC §§704-706 govern trustee vacancy, resignation, and removal. Section 706 permits a court to remove a trustee at the request of a settlor, a co-trustee, or a beneficiary on grounds including serious breach of trust, unfitness, unwillingness or persistent failure to administer effectively, or substantial change in circumstances if removal serves the trust's purpose. This is a significant expansion of common-law removal standards.
• Article 8 — Duties and Powers of Trustee. UTC §808 permits a settlor to give a trust protector, advisor, or other third party the power to direct the trustee. UTC §813 imposes a duty on the trustee to keep qualified beneficiaries reasonably informed about the trust's administration and to promptly furnish requested information. This provision is one of the most-modified UTC sections at the state level — some states permit the trust instrument to waive it, others treat it as non-waivable public policy.

The 37-jurisdiction UTC adoption map for 2026

The ULC's official enactment tracker, cross-referenced against each state's statutory code compilation, shows the following adoption status as of August 2026:

Adoption status per the Uniform Law Commission enactment tracker cross-referenced with each state's statutory code compilation. "Full UTC enactment" means the state has enacted a statute that follows the UTC's overall architecture; every enacting state modifies specific sections. Washington's enactment was signed in 2024 and took effect January 1, 2025.^[4]

Three qualifications matter. First, Louisiana operates under a civil-law legal system rather than a common-law one — trusts are handled in the Louisiana Trust Code (Title 9, Louisiana Revised Statutes §§9:1721-2252), which predates the UTC by decades and follows a different underlying doctrinal structure. Louisiana is a permanent non-UTC state for structural reasons, not just legislative-history ones.

Second, the four states most often chosen as governing-law jurisdictions by out-of-state retirees — Delaware, Nevada, South Dakota, and Alaska — are non-UTC by design. Each has built statutes that would be diluted or preempted by the UTC's default rules if adopted verbatim. Delaware's Title 12 trust code (12 Del. C. §§3301-3350) and its associated case law is the model for trust-situs competition; South Dakota's Trust Company statute at S.D. Codified Laws §§55-1 to 55-18 pioneered the private-trust-company structure; Nevada's Title 13 chapter 163 (NRS 163.005-556) and Alaska's AS 13.36 both grew from adoption of dynasty trust and directed trust provisions.

Third, some UTC states have adopted the UTC's overall architecture but retained substantially different rules in specific sections. Florida and Pennsylvania both enacted the UTC but modified §813's mandatory-notification duty to permit broader waiver. Ohio and Illinois both enacted the UTC and layered separate decanting statutes on top. Arkansas enacted the UTC but retained a more restrictive spendthrift regime. This is why the "UTC state" label is a starting point for legal analysis, not a conclusion.

The federal see-through trust requirements — same in every state

Before drilling into state variation, it helps to fix the federal ground truth. A trust that holds an inherited IRA can be treated as a "designated beneficiary" for RMD purposes — the see-through-trust status that unlocks life-expectancy or 10-year distribution rather than the more punitive 5-year rule that applies to non-designated-beneficiary trusts — only if it meets four requirements under Treas. Reg. §1.401(a)(9)-4(f)(2):^[2]

1. The trust must be valid under state law, or would be but for the fact it has no corpus. This is the primary point at which state trust law directly enters the federal analysis. A trust that fails state-law validity fails federal see-through qualification.
2. The trust must be irrevocable, or become irrevocable at the participant's death. Federal rule; state law does not vary.
3. The beneficiaries of the trust who are beneficiaries with respect to the trust's interest in the IRA must be identifiable from the trust instrument. State law of contract and trust interpretation controls whether the language is definite enough.
4. Documentation must be provided to the IRA custodian by October 31 of the year following the year of the participant's death. Federal deadline; state law does not vary.

Federal law then splits designated-beneficiary trusts into "conduit" and "accumulation" varieties under the 2024 amendments to §1.401(a)(9)-4(f)(3). A conduit trust must pass through every dollar of RMD to the individual beneficiary in the year received; an accumulation trust may retain distributions inside the trust and pay the compressed IRC §1(e) trust-bracket tax on the retained income. The choice between conduit and accumulation is the single most consequential drafting decision for an inherited-IRA trust, and it is a state trust-law decision even though the tax consequences flow through federal law.

The four state-law variables that decide the drafting

Once the federal see-through-qualification threshold is cleared, four state-law variables drive the drafting choice for a trust holding an inherited IRA.

Variable 1 — Spendthrift protection

UTC §502 provides that a spendthrift provision is valid if the trust states that "the interest of a beneficiary is held subject to a 'spendthrift trust,' or words of similar import." Once valid, the beneficiary's interest may not be voluntarily transferred and cannot be reached by creditors before distribution, subject to the §§503-504 carve-outs for child support, spousal support, and certain government claims.

Non-UTC states vary considerably. Delaware's §3536 provides one of the strongest spendthrift regimes in the country. Nevada's NRS 166.170 protects self-settled spendthrift trusts subject to a two-year seasoning period. California Prob. Code §15300 provides spendthrift protection for beneficiary interests but §15304 makes the settlor's beneficial interest in a self-settled trust reachable by creditors up to the maximum amount the trustee could have distributed. Texas Property Code §112.035 provides spendthrift protection but treats a self-settled trust as reachable by settlor's creditors under Trust Code §112.035(d).

For an inherited-IRA trust, the practical question is: if the adult child beneficiary is sued, divorces, or files bankruptcy during the 10-year window, will the annual distributions (in a conduit trust) or the accumulated corpus (in an accumulation trust) be reachable by creditors before it hits the beneficiary? UTC §502 combined with the U.S. Supreme Court's Clark v. Rameker, 573 U.S. 122 (2014) decision — which held that inherited IRAs are not "retirement funds" and therefore lose bankruptcy protection under 11 U.S.C. §522(b)(3)(C) — makes the trust wrapper materially more protective than a direct beneficiary designation for the same beneficiary.^[5]

Variable 2 — Trustee removal by beneficiaries

UTC §706(b)(4) permits a court to remove a trustee at the request of a beneficiary if "there has been a substantial change of circumstances, or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable co-trustee or successor trustee is available."

This is a significant expansion of common-law standards. Under the common law, courts would generally remove a trustee only for demonstrated breach of trust, hostility that materially impaired administration, or unfitness. Under UTC §706(b)(4), the "substantial change of circumstances" ground and the "request by all qualified beneficiaries" ground both provide additional levers.

For an inherited-IRA trust, this matters because a corporate trustee that fails to adjust distribution timing to changing beneficiary tax situations across a 10-year window can predictably cost the family tens of thousands of dollars. In a UTC state, the adult child beneficiaries can petition to replace that trustee under §706(b)(4). In a non-UTC state that has not adopted a similar expansion, they may be stuck with the trustee until they can prove actionable breach.

Variable 3 — Decanting and modification

Trust decanting — the trustee's power to distribute assets from one trust to a new, more favorable trust — grew from a 1998 New York statute (Est. Powers & Trusts Law §10-6.6) into a widespread state-law regime. As of 2026, approximately 30 states plus DC have specific decanting statutes; the rest permit decanting under common-law trust-modification doctrines or under UTC §414's modification-to-achieve-tax-objectives provision.

The Uniform Trust Decanting Act, promulgated by the ULC in 2015, has been adopted in a growing minority of states — Alabama, California (in modified form), Colorado, District of Columbia, Illinois, Kentucky, Nevada, New Mexico, North Carolina, Vermont, Virginia, Washington, and Wyoming are among the enactors. Even in non-UTDA states, most UTC-adopting states permit decanting either through a specific statute or through UTC §414.

For an inherited-IRA trust, decanting matters because circumstances change across a 10-year window. A trust drafted in 2018 for a minor beneficiary who is now 18 may need to be restructured to reflect the beneficiary's actual adult tax situation, education plans, or disability status. In a state with strong decanting authority, that restructuring is a trustee's administrative action; in a state without it, it requires court intervention.

Variable 4 — Information and reporting duties to beneficiaries

UTC §813 requires the trustee to keep qualified beneficiaries reasonably informed about the trust's administration and to promptly respond to a beneficiary's request for information related to the administration. Subsection (b) further requires the trustee to notify qualified beneficiaries of the trust's existence within 60 days of accepting trusteeship (for an irrevocable trust) and to send an annual accounting.

UTC §813 is one of the most-modified sections at the state level. Roughly half the UTC-adopting states permit the trust instrument to waive some or all of §813's requirements; roughly half treat the core informational duties as non-waivable public policy. For an inherited-IRA trust in a family where the account owner wants to keep the beneficiaries in the dark until distribution time, the state-law rule on §813 waivability is a critical drafting question.

The four affirmatively chosen non-UTC states — Delaware, Nevada, South Dakota, Alaska

Any competent estate-planning attorney working with a client who has multi-million-dollar IRA assets will at least consider situsing the see-through trust in one of the four "trust states" — Delaware, Nevada, South Dakota, or Alaska. Each has features that a UTC state cannot match, and each is chosen for a different reason.

Delaware

Delaware's Title 12 trust code (12 Del. C. §§3301-3350) is the industry-standard directed-trust jurisdiction. Delaware Statutory Trust Act §3313 provides a bright-line split between the "trust adviser" (who directs investment or distribution decisions) and the "excluded fiduciary" (who administers but has no duty to review the adviser's directions). This is meaningfully stronger than UTC §808's requirement that the trustee "must not comply with a direction that is manifestly contrary to the terms of the trust or would constitute a serious breach of a fiduciary duty owed by the trustee to the beneficiaries."

Delaware also has no rule against perpetuities for personal property held in trust — a Delaware personal-property trust can theoretically last forever. Its case-law-tested asset-protection-trust regime, the Delaware Court of Chancery's specialized trust jurisdiction, and its no-state-income-tax-on-non-resident-trust-beneficiaries structure (Del. Code §1601 et seq.) make it a common choice for see-through trusts intended to hold inherited-IRA assets for multiple generations.

Nevada

Nevada's NRS Title 13, Chapter 163 (NRS 163.005-556) and its Domestic Asset Protection Trust statute at NRS 166 provide the shortest asset-protection seasoning period in the country — two years for future creditors and, in some cases, 6 months for existing creditors who had actual notice. Nevada permits perpetuities up to 365 years, has no state income tax, and offers directed-trust and private-trust-company statutes that closely mirror Delaware's.

South Dakota

South Dakota's S.D. Codified Laws Title 55 permits perpetual trusts, provides one of the country's most protective spendthrift regimes, has no state income tax, and pioneered the private-trust-company structure. South Dakota's Governor's Task Force on Trust Administration Review meets annually to identify and correct competitive gaps in the state's trust code, which has produced a statutory environment that responds quickly to sophisticated planner requests. For very large estates — $10M and up in retirement-account assets — South Dakota is disproportionately chosen as the governing-law jurisdiction.

Alaska

Alaska's AS 13.36 permits perpetual trusts and was the first state (1997) to enact a domestic asset-protection-trust statute. Alaska's Trust and Estate Dispute Resolution Act (TEDRA at AS 13.36.157) provides an efficient alternative to court modification, and the state's Trust Company Act permits privately-held trust companies with lower minimum capital requirements than most other trust-competition states.

How the 10-year rule interacts with UTC vs common-law state trust codes

The SECURE Act of 2019 added IRC §401(a)(9)(H), which imposed the 10-year distribution rule on most non-eligible-designated-beneficiary heirs.^[1] The regulatory framework was clarified by TD 10001 in July 2024, which established that non-eligible-designated-beneficiary heirs whose account owner died on or after the required beginning date must take annual RMDs during years 1-9 in addition to the year-10 full distribution.^[2]

For a see-through trust holding an inherited IRA, the practical effect is a 10-year forced drawdown that hits the trust's income at whatever bracket applies. For an accumulation trust, that bracket is the compressed IRC §1(e) trust schedule — 37% federal on all ordinary income above $16,000 for 2026, plus 3.8% NIIT on much of that income above $16,700 for 2026, producing a 40.8% combined marginal rate at very modest dollar thresholds.^[6] For a conduit trust, that bracket is the individual beneficiary's rate — which for a mid-career adult child in a $180K MFJ household is 22% federal plus whatever state rate applies, typically for a combined effective rate of 25%-30%.

The state trust-code question that arises across the 10-year window is: can the trustee shift between conduit and accumulation treatment as circumstances change, and can distribution timing be adjusted year by year to smooth bracket exposure?

Worked example — $1.4M IRA with three adult child beneficiaries, UTC state vs non-UTC state

Consider a $1.4M IRA inherited in 2026 by a see-through trust with three adult child beneficiaries — ages 42, 45, and 48. The trust is drafted as an accumulation trust because two of the three children have creditor concerns.

Illustrative. Actual tax depends on each beneficiary's total income, filing status, state of residence, and year of distribution. The Delaware situs benefit assumes non-resident-beneficiary treatment under Del. Code §1601 et seq.; California-resident beneficiaries pay CA tax on their distributive share regardless of trust situs under Cal. Rev. & Tax. Code §17742.

The critical observation: the difference between the Ohio-UTC outcome and the California-non-UTC outcome is not primarily about the trust code. It is about the state income tax layered on top. But the difference between a well-drafted UTC-state trust that permits mid-decade conduit conversion and a poorly-drafted trust that locks the beneficiaries into accumulation treatment at compressed trust brackets is easily $200,000-$400,000 on the same $1.4M starting balance.

The drafting checklist for a 2026 see-through trust

Regardless of state, every see-through trust holding an inherited IRA should be reviewed against the following list before the account owner's next birthday.

1. Governing-law clause. Does the trust instrument specify which state's law governs? UTC §107 permits designation of any state with a substantial relation to the trust. If the trust does not specify, default rules apply — usually the state where the trust is administered.
2. Conduit vs accumulation classification. Is it explicit? A trust that is silent will usually be treated as an accumulation trust by default, which triggers the compressed trust bracket on any retained income.
3. Trustee removal grounds. Does the instrument permit beneficiaries to remove a trustee without cause? If not, UTC §706 default rules will apply in UTC states — but the instrument can override.
4. Decanting authority. Does the instrument permit the trustee to decant to a new trust, or is decanting authority limited to the state statute? Explicit instrument authority is materially easier to exercise than statute-only decanting.
5. Modification authority. Does the instrument permit non-judicial modification with beneficiary consent? UTC §411 provides this in enacting states, but the instrument can expand or restrict.
6. Information and reporting duty. Does the instrument waive or expand UTC §813's default reporting duties? In non-UTC states this is a state-specific analysis.
7. Directed-trust and trust protector provisions. Is there a trust protector with power to modify, remove trustees, or shift governing law? Modern drafting typically includes a trust protector for exactly this reason.
8. SECURE Act compliance. Has the trust been reviewed against the July 2024 TD 10001 regulations? Any trust drafted before 2020 was drafted under a stretch-IRA regime that no longer exists for most non-EDB beneficiaries.

Action checklist for a retiree with an inherited-IRA trust

Frequently asked questions