ABA Approves Five New Uniform Acts

(February 6, 2018) -

Uniform Law Commission
111 N. Wabash Ave., Suite 1010, Chicago, IL  60602
312/450-6600, www.uniformlaws.org

Contact:  Katie Robinson, ULC Communications Officer, krobinson@uniformlaws.org

For Immediate Release:

ABA Approves Five New Uniform Acts

February 6, 2018 – Five new uniform acts have been approved by the American Bar Association’s House of Delegates as “appropriate Acts for those states desiring to adopt the specific substantive law suggested therein.” The acts were approved at the ABA’s Midyear Meeting in Vancouver, January 31 to February 6, 2018.  All of the acts were drafted and approved by the Uniform Law Commission (ULC) in 2017.  

The Uniform Directed Trust Act (UDTA) addresses the rise of directed trusts.  In a directed trust, a person other than a trustee has a power over some aspect of the trust’s administration.  Such a person may be called a “trust protector,” “trust adviser,” or in the terminology of the UDTA, a “trust director.”  The division of authority between a trust director and a trustee raises difficult questions about how to divide fiduciary power and duty.  The Uniform Directed Trust Act provides clear, functional rules that allow a settlor to freely structure a directed trust while preserving key fiduciary safeguards for beneficiaries.  The UDTA also provides sensible default rules for a variety of matters that might be overlooked in the drafting of a directed trust, including information sharing among trustees and trust directors, the procedures for accepting appointment as a trust director, the distinction between a power of direction and a nonfiduciary power of appointment, and many other matters.

The Uniform Guardianship, Conservatorship, and Other Protective Arrangements Act is an updated version of the Uniform Guardianship and Protective Proceedings Act, originally promulgated in 1969 as part of the Uniform Probate Code, and revised in 1982 and 1997.  This new version is a comprehensive and modern guardianship statute that better protects the individual rights of both minors and adults subject to a guardianship or conservatorship order.  The Act promotes person-centered planning to incorporate an individual’s preferences and values into a guardianship order, and requires courts to order the least-restrictive means necessary for protection of persons who are unable to fully care for themselves.  The act includes a set of optional forms to help courts implement its provisions effectively.

The Uniform Parentage Act (2017) is a revision of the Uniform Parentage Act (UPA) of 2000, which has been adopted in 11 states.  The UPA covered several topics, including:  the parent-child relationship; voluntary acknowledgments of paternity; registry of paternity; genetic testing; proceedings to adjudicate parentage of children of assisted reproduction.  As a result of the Supreme Court decision in Obergefell v. Hodges, as well as other developments in the states, a revision to the Act became necessary.  The revised Act addresses issues related to same-sex couples, surrogacy, the right of a child to genetic information, de facto parentage, and parentage of children conceived through sexual assault.

The Uniform Protected Series Act provides a comprehensive framework for the formation and operation of a protected series limited liability company.  A protected series LLC has both “horizontal” liability shields, as well as the standard “vertical” liability shield.  All modern business entities provide the traditional, “vertical” shield – protecting the entity’s owners (and their respective assets) from automatic, vicarious liability for the entity’s debts.  A “series” limited liability company provides “horizontal” shields – protecting each protected series (and its assets) from automatic, vicarious liability for the debts of the company and for the debts of any other protected series of the company.  A horizontal shield likewise protects the series limited liability company (and its assets) from creditors of any protected series of the company.  The Act integrates into any existing LLC Act, whether it is the Uniform Limited Liability Company Act or not.

The Uniform Regulation of Virtual-Currency Businesses Act (URVCBA) creates a statutory framework for regulating virtual currency business activity, which includes businesses engaged in the exchange of virtual currencies for cash, bank deposits, or other virtual currencies; the transfers of virtual currency between customers; and certain custodial or fiduciary services.  Under the Act, “virtual currency” is a digital representation of value that is used as a medium of exchange, unit of account, or store of value and is not legal tender.  This technology-neutral definition covers as many types of virtual currency as possible.  The URVCBA’s unique, three-tiered structure clarifies whether an individual or company engaging in virtual currency business activity is (1) exempt from the act; (2) must register; or (3) must obtain a license.  The URVCBA also contains numerous consumer protections.

Information on each of these uniform acts is available at the ULC’s website at www.uniformlaws.org.

The Uniform Law Commission, now in its 127th year, provides states with non-partisan, well-conceived and well-drafted legislation that brings clarity and stability to critical areas of state statutory law.  The organization comprises more than 300 lawyers, judges, and law professors, appointed by the states as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, to research, draft and promote enactment of uniform state laws in areas of state law where uniformity is desirable and practical.  Since its inception in 1892, the group has promulgated more than 200 acts, among them such bulwarks of state statutory law as the Uniform Commercial Code, the Uniform Probate Code, and the Uniform Partnership Act.