National Conference of Commissioners on Uniform State Laws

211 E. Ontario St., Suite 1300, Chicago, IL 60611
tel 312-915-0195, fax 312-915-0187

For Immediate Release

KANSAS FIRST STATE TO ENACT NEW UNIFORM TRUST CODE

May 21, 2002 — Kansas has become the first state to enact the Uniform Trust Code (UTC), an important new uniform law which provides a comprehensive model for codifying the law on trusts. The legislation (SB 297) was signed into law by Gov. Bill Graves on May 17. This law becomes effective in Kansas on January 1, 2003.

The UTC was drafted and approved by the National Conference of Commissioners on Uniform State Laws (NCCUSL). Trusts are used to transfer property to beneficiaries without probate, and, in some cases, to reduce adverse tax consequences. The use of trusts, both in family estate planning and commercial transactions, has increased dramatically in recent years. This has resulted in a corresponding rise in the number of day-to-day questions involving trusts and the recognition that trust law in many states is quite thin.

"The enactment of the Uniform Trust Code in Kansas is an important first step for updating trust law nationwide," says Michelle Clayton, NCCUSL Legislative Counsel. "While many states continue to rely on the common law in trust matters, the Trust Code provides a comprehensive set of statutory rules on trusts, providing individuals with a readily available source for determining the law on trusts."

The UTC is a default statute, containing a set of basic default rules that fairly, consistently and clearly govern voluntary trusts. The UTC contains provisions on the creation of trusts, representation, day-to-day administration, and their modification and termination. With only limited exceptions, anyone who creates a trust may spell out in the trust's terms how the trust is to be administered and distributed. The exceptions include the requirements for creating a trust, the duty of a trustee to act in good faith, and the requirement that a trust and its terms be for the benefit of its beneficiaries.

Many individuals today use the revocable trust (sometimes called a "living" trust) as their primary estate planning document to avoid probate. The revocable trust allows the individual who set up the trust to retain complete control over the property until death. As the name suggests, the person who creates a revocable trust may revoke the terms of the trust at any time.

Importantly, the UTC has a separate article on revocable trusts. The UTC in general treats a revocable trust as the functional equivalent of a will but without the procedural formalities and court supervision involved in probate.

Besides Kansas, the Uniform Trust Code has been introduced in nine other states since it was approved in August 2000: Connecticut, District of Columbia, Minnesota, Nebraska, New Mexico, Oklahoma, Tennessee, Utah, and West Virginia. It is being studied by bar associations and legislative committees in more than 30 states.

The National Conference of Commissioners on Uniform State Laws is now in its 111th year. 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 draft proposals for uniform and model laws and work toward their enactment in their legislatures. 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.

For further information, please contact Michelle Clayton, John McCabe, or Katie Robinson at 312-915-0195, or Gabrielle Bamberger at 212-333-5222. Further information on the UTC can be found at NCCUSL's website at www.nccusl.org.