To: Trust and Estate Subcouncil, ABA RPTE Section
From: David English, Executive Director, JEB Uniform Trusts and Estates Acts
Re: NCCUSL Report
Date: November 5, 2009
The function of the JEB, on which the Section has three official representatives (Joe
Kartiganer, Carlyn McCaffrey, Malcolm Moore) is to make recommendations on new projects,
to advise on the drafting of uniform acts, and to monitor the progress of and to recommend
amendments to already existing uniform acts. Following is a report on current JEB projects and
other NCCUSL activities related to trusts and estates.
Already Approved Uniform Acts
The shelf life of a uniform act is usually about 20 years. A chart of enactments normally
looks like a bell-shaped curve, usually starting slowly, picking up in the second and third year
and then declining at some later point. The following are recent acts on which there is still
significant enactment activity.
Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act (2007)–13
enactments to date. Numerous introductions and enactments are expected in 2010.
Uniform Anatomical Gift Act (2006)–these are amendments to an already existing
uniform act. There have been 39 enactments to date. The Act has done particularly well because
of a well-financed lobbying effort by the Organ Procurement Organizations.
Uniform Prudent Management of Institutional Funds Act (2006)–45 enactments to date.
Like Anatomical Gifts, this enactment effort is well-financed.
Uniform Power of Attorney Act (2006)–4 enactments to date. There have been numerous
legislative introductions but significant banker opposition had made enactment difficult.
Uniform Estate Tax Apportionment Act (2003)–6 enactments to date.
Uniform Trust Code (2000)–23 enactments to date.
Uniform Disclaimer of Property Interest Act (1999)–16 enactments to date.
Uniform Probate Code amendments–significant amendments were approved in 2008.
The amendments have three objectives: (1) to update the Code to address issues related to
assisted reproduction technology; (2) to update for other changes in the parent-child relationship,
such as changes in adoption; and (3) to address other and mostly minor issues that have arisen
over the last decade. These amendments have been enacted to date in 2 states.
Uniform Principal and Income Act (1997)–43 enactments to date. Amendments to
Sections 409 and 505 were approved in 2008. The amendment to Section 409 fixes marital
deduction problems caused by Rev. Rul. 2006-26, in which the Service ruled that the 90/10
allocation rule for distributions from an IRA or qualified plan could result in disqualification of a
trust for the marital deduction. The amendment requires that the trust allocate or allow the
spouse to withdraw the amount necessary so that the trust will be deemed to have sufficient
income for marital deduction purposes. The amendment to Section 505 clarifies the treatment of
taxes on phantom income from an LLC or other flow-through entity. The 2008 amendments have
been enacted to date in 17 states.
Uniform Guardianship and Protective Proceedings Act (1997)–6 enactments to date.
2009 Annual Meeting
Real Property Transfer on Death Act (2009)–This new Act allows an individual or
couple to name a survivor beneficiary on a deed without currently conveying any interest.
Invented in Missouri in the late 1980s, the transfer on death deed concept has been enacted by a
number of other states within the past several years. The Section was heavily represented in this
project. The Reporter was Tom Gallanis of the University of Minnesota, Co-Chair of the Trusts
and Estates Division Committee on Uniform Laws. The ABA Advisor was Dennis Horn, who
was appointed by the Section. The Section Advisor was Susan Gary. The RPTE Section has
agreed to cosponsor the Act when it is submitted to the ABA House of Delegates for approval in
Uniform Collaborative Law Act (2009)–this new Act provides a statutory structure for a
type of ADR known as collaborative law, under which the parties and the lawyers agree that if a
settlement can’t be reached, the parties will be required to retain new counsel when the dispute
goes to court. Collaborative law is used today primarily to settle divorce cases but the Act is not
so limited. Significant opposition is expected when the Act will be submitted to the ABA House
of Delegates for approval next February. The Family Law, ADR, and IRR Sections support the
Act while the Litigation Section is opposed. The Section needs to formulate a position on the
Uniform Law Enforcement Access to Entity Information Act (2009)--is designed to be a
substitute for the Incorporation Transparency and Law Enforcement Assistance Act (S.569),
currently pending in Congress (co-sponsored by Senators Levin, Grassley, and McCaskill).
S.569 would require virtually all corporations and limited liability companies to file “beneficial
ownership” information with the Secretary of State. The Uniform Act, a joint project with the
ULC and the American Bar Association Committee on Corporate Laws, and supported by the
National Association of Secretaries of State, would preserve the traditional confidentiality of
entity ownership and would instead require the filing of the name of an individual (a records-
contact) who would be responsible for obtaining, maintaining, and verifying record ownership
information. Promotion of this Act is being held in abeyance pending a determination of
whether an enactment push is needed to forestall Congressional enactment of more intrusive
legislation like S. 569.
Current Drafting Committees
Insurable Interests in Trusts–this drafting committee is drafting an amendment to the
UTC to deal with insurable interests of trustees and problems raised by Chawla, which held, as
an alternative ground, that a life policy was invalid because the trustee did not have an insurable
interest. Dave Neufeld, who was appointed by the Section, is the ABA Advisor. The
amendment, which will consist of one section, is expected to be approved next summer.
Possible Future Drafting Projects
Mental Health Advance Directives–a study committee was recently appointed to study
whether the Commissioners should draft a uniform act on this topic. It is expected that the
Reporter and at least one Advisor will be drawn from the Section.
Uniform Premarital Agreement Act (1982)–this Act has had 27 enactments to date.
Despite this success, families have changed over the last 25 years and the Act may need
updating. The Act also does not deal with post-marital agreements, a significant omission.
NCCUSL has appointed a study committee to determine if consensus can be reached between
estate and family law practitioners and to make recommendations on whether a new Act is
needed and what that new Act should contain.