State-by-state actions to adopt an updated, standardized set of trust rules are triggering fears of privacy violations.

The Uniform Trust Code, or UTC, is designed to clarify sometimes-confusing trust laws, which differ from state to state, the Wall Street Journal reported. Legal observers said a national codification of the trust laws should simplify matters for trust creators, trustees and heirs.

The UTC has already been approved in 10 jurisdictions. Twenty state bar or legislative groups are studying the code, and the UTC legislation is expected to be introduced in at least 10 states next year.

In addition to standardizing trust law, the UTC outlines the rights and duties of trust creators, trustees and beneficiaries, and makes trust law readily available to the public. It also includes one controversial provision: requiring trustees to notify certain beneficiaries - charities or people who are 25 or older - of an irrevocable trust.

Wealthy families often use trusts to hand assets over to family members while lowering their tax bills. It is not unusual, however, for beneficiaries to be unaware that they will receive a windfall in the future. Critics told the Wall Street Journal that the knowledge of a trust could lessen a beneficiary's desire to work. It could also create disputes among family members who can learn exactly how much money they will receive. The matter can get even more sensitive if the trust creator is still alive when the beneficiaries learn how much is at stake.

These kinds of concerns prompted the state of Arizona to repeal the law. In fact, Joseph I. McCabe, a Phoenix estate attorney, said some of his clients were "highly offended" by the notification requirements. "It was a very big issue," he said.

Another concern about the UTC is that it allows a trust creator to change an irrevocable trust without the approval of the recipients. Some estate lawyers fear that trust creators will be given too much power. Changing the terms of a trust, for example by moving assets back into an estate, would make them subject to estate taxes.

More information on the UTC can be found at www.utcproject.org.