UNIFORM TESTAMENTARY ADDITIONS TO TRUSTS ACT (1991)
Drafted by the
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
and by it
APPROVED AND RECOMMENDED FOR ENACTMENT
IN ALL THE STATES
at its
ANNUAL CONFERENCE
MEETING IN ITS ONE-HUNDREDTH YEAR
IN NAPLES, FLORIDA
AUGUST 2 - 9, 1991
WITH PREFATORY NOTE AND COMMENTS
Approved by the American Bar Association
Dallas, Texas, February 4, 1992
UNIFORM TESTAMENTARY ADDITIONS TO TRUSTS ACT (1991)
The Committee that acted for the National Conference of Commissioners on Uniform State Laws in preparing the Uniform Testamentary Additions to Trusts Act (1991) was as follows:
RICHARD V. WELLMAN, University of Georgia, School of Law, Athens
GA 30602, Chairman
FLORENCE NELSON CRISP, P.O. Box 7146, Greenville, NC 27835
RICHARD E. FORD, 203 W. Randolph Street, Lewisburg, WV 24901
CLARKE A. GRAVEL, P.O. Box 1049, Burlington, VT 05402
JOHN H. LANGBEIN, Yale Law School, New Haven, CT 06520
ROBERT A. STEIN, University of Minnesota, School of Law,
Minneapolis, MN 55455
OGLESBY H. YOUNG, 8th Floor, 520 S.W. Yamhill Street, Portland,
OR 97204
LAWRENCE A. WAGGONER, University of Michigan Law School, Ann
Arbor, MI 48109-1215, Reporter
LAWRENCE J. BUGGE, P.O. Box 1497, Madison, WI 53701,
President (Member Ex Officio)
WILLIAM J. PIERCE, University of Michigan Law School, Ann Arbor,
MI 48109-1215, Executive Director
WILLIAM S. ARNOLD, P.O. Drawer A, Crossett, AR 71635,
Chairman, Division D (Member Ex Officio)
REVIEW COMMITTEE
FRANK W. DAYKIN, Chairman, 4745 Giles Way, Carson City, NV 89704
TIMOTHY J. CRONIN, JR., New England School of Law, 154 Stuart
Street, Boston, MA 02116
ALVIN J. MEIKLEJOHN, JR., Suite 1600, 1625 Broadway, Denver, CO
80202
Advisor to Drafting Committee
MARTIN D. BEGLEITER, American Bar Association
Special Representative to Drafting Committee
GAIL McNIGHT BECKMAN, National Association of Women Lawyers
Joint Editorial Board for Uniform Probate Code
Uniform Law Conference Representatives:
CLARKE A. GRAVEL, P.O. Box 1049, Burlington, VT 05402
JOHN H. LANGBEIN, Yale Law School, New Haven, CT 06520
ROBERT A. STEIN, University of Minnesota, School of Law,
Minneapolis, MN 55455
American Bar Association Representatives:
JACKSON M. BRUCE, JR., 28th Floor, 411 East Wisconsin Avenue,
Milwaukee, WI 53202
EDWARD C. HALBACH, JR., University of California, School of Law,
Boalt Hall, Berkeley, CA 94720
MALCOLM A. MOORE, 2600 Century Square, 1501 Fourth Avenue,
Seattle, WA 98101, Chair
American College of Trust and Estate Counsel Representatives:
CHARLES A. COLLIER, JR., Suite 800, 1800 Avenue of the Stars,
Los Angles, CA 90067
JOE C. FOSTER, JR., 1000 Michigan National Tower, Lansing,
MI 48933
RAYMOND H. YOUNG, 60 State Street, Boston, MA 02109
HARRISON F. DURAND, 2nd Floor, 65 Livingston Avenue, Roseland,
NJ 07068, Emeritus
HARLEY J. SPITLER, 20th Floor, One Maritime Plaza, San Francisco,
CA 94111, Emeritus
J. PENNINGTON STRAUS, Suite 3600, 1600 Market Street,
Philadelphia, PA 19103, Emeritus
State Courts and Law School Teachers Liaisons:
JAMES R. WADE, Suite 400, 360 South Monroe Street,
Denver, CO 80209
MARY LOUISE FELLOWS, University of Minnesota, School of Law,
Minneapolis, MN 55455
EUGENE F. SCOLES, University of Oregon, School of Law,
11th & Kincaid Avenue, Eugene, OR 97403
Executive Director:
RICHARD V. WELLMAN, University of Georgia School of Law, Athens,
GA 30602
Director of Research and Chief Reporter:
LAWRENCE W. WAGGONER, University of Michigan Law School, Ann
Arbor, MI 48109-1215
Final, approved copies of this Act and copies of all Uniform and Model Acts and other printed matter issued by the Conference may be obtained from:
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
676 North St. Clair Street, Suite 1700
Chicago, Illinois 60611
(312) 915-0195
UNIFORM TESTAMENTARY ADDITIONS TO
TRUSTS ACT (1991)
PREFATORY NOTE
The Uniform Testamentary Additions to Trusts Act (UTATA) was first promulgated in 1960 and was incorporated into the Uniform Probate Code of 1969 as Section 2-511. The UTATA or substantially similar legislation has been enacted in the District of Columbia and nearly all of the states.
The 1960 version of the UTATA clarified the law with respect to the validity of so-called pour-over devises or bequests to a receptacle trust. The validity of a pour-over devise or bequest was then in doubt because of the general requirement that the ultimate beneficiaries of a testator's estate can only be validly designated in a document executed in accordance with the special statutory formalities for a validly executed will. The ultimate beneficiaries of a pour-over devise or bequest are not designated in the testator's validly executed will, but in the receptacle trust document, which in most cases is a document that is not executed in accordance with those special formalities. To be sure, if the trust document was in existence when the will was executed, most courts utilized the common-law doctrine of incorporation by reference to validate the pour-over devise or bequest. But that doctrine was not wholly satisfactory. By incorporating the terms of the inter-vivos trust into the will, the doctrine theoretically led to two trusts -- one, the inter-vivos trust containing the property transferred to the trust during the testator's lifetime; and the other, a testamentary trust governed by the incorporated terms of the inter-vivos trust and containing the property covered by the "pour-over" devise or bequest. The doctrine was also incapable of curing cases in which the testator amended the receptacle trust after executing the will, because that doctrine does not allow incorporation of the terms of the post-execution amendment. Eventually, a few courts held that a pour-over devise or bequest to a subsequently amended receptacle trust was valid under a different common-law doctrine, the doctrine of independent significance. The courts held that the post-execution amendment had independent significance; the amendment not only purported to control the ultimate disposition of the poured-over assets, but also of the assets that had been transferred to the receptacle trust during the testator's lifetime. By this time, however, it had come to be generally thought that the cleanest and most reliable way of dealing with the pour-over problem was through enabling legislation -- hence the promulgation of UTATA in 1960 and its widespread enactment throughout the country.
In general, the 1960 version of the UTATA validated pour-over devises and bequests to receptacle trusts whether or not the receptacle trust was amended after the will was executed, as long as the terms of the receptacle trust were set forth in a written instrument executed before or concurrently with the execution of the testator's will. It also avoided the two-trust problem by providing that the poured-over assets become part of the inter-vivos receptacle trust.
This 1991 version of the UTATA originated in the revisions of Article II of the Uniform Probate Code that were approved in 1990. These revisions increase the intent-effectuating characteristics of the original Act. Section 2-511 of the revised Uniform Probate Code and the 1991 revision of the UTATA make the following intent-effectuating improvements: they make it clear that the receptacle "trust" need not have been established (funded with a trust res) during the testator's lifetime, but can be established (funded with a res) by the devise or bequest itself; allow the trust terms to be set forth in a written instrument executed after as well as before or concurrently with the execution of the will; require the bequeathed or devised property to be administered in accordance with the terms of the trust as amended after as well as before the testator's death, unless the testator's will provides otherwise; and allow the testator's will to provide that the devise or bequest is not to lapse even if the trust is revoked or terminated before the testator's death.
This 1991 version of the UTATA is appropriate for enactment in states that have not enacted Section 2-511 of the Uniform Probate Code as revised in 1990 or Section 511 of the Uniform Act on Intestacy, Wills, and Donative Transfers (1991).
UNIFORM TESTAMENTARY ADDITIONS TO
TRUSTS ACT (1991)
Section.
1. Testamentary Additions to Trusts.
2. Effect on Existing Wills.
3. Uniformity of Application and Construction.
4. Short Title.
5. Severability Clause.
6. Repeal.
7. Effective Date.
SECTION 1. TESTAMENTARY ADDITIONS TO TRUSTS.
(a) A will may validly devise or bequeath property to the trustee of a trust established or to be established (i) during the testator's lifetime by the testator, by the testator and some other person, or by some other person including a funded or unfunded life insurance trust, although the trustor has reserved any or all rights of ownership of the insurance contracts, or (ii) at the testator's death by the testator's devise to the trustee, if the trust is identified in the testator's will and its terms are set forth in a written instrument, other than a will, executed before, concurrently with, or after the execution of the testator's will or in another individual's will if that other individual has predeceased the testator, regardless of the existence, size, or character of the corpus of the trust. The devise or bequest is not invalid because the trust is amendable or revocable, or because the trust was amended after the execution of the will or the testator's death.
(b) Unless the testator's will provides otherwise, property devised or bequeathed to a trust described in subsection (a) is not held under a testamentary trust of the testator but it becomes a part of the trust to which it is devised or bequeathed, and must be administered and disposed of in accordance with the provisions of the governing instrument setting forth the terms of the trust, including any amendments thereto made before or after the testator's death.
(c) Unless the testator's will provides otherwise, a revocation or termination of the trust before the testator's death causes the devise or bequest to lapse.
COMMENT
Purpose and Scope of 1991 Revisions. As revised, this section makes it clear that the receptacle "trust" need not have been established (funded with a trust res) during the decedent's lifetime, but can be established (funded with a res) by the devise or bequest itself. The original version probably contemplated this result and should be so interpreted (because of the phrase "regardless of the existence ... of the corpus of the trust"). Indeed, a few cases have expressly stated that statutory language like the original version authorizes pour-over devises and bequests to unfunded trusts. E.g., Clymer v. Mayo, 473 N.E.2d 1084 (Mass. 1985); Trosch v. Maryland Nat'l Bank, 32 Md. App. 249, 359 A.2d 564 (1976). The authority of these pronouncements is problematic, however, because the trusts in these cases were so-called "unfunded" life-insurance trusts. An unfunded life-insurance trust is not a trust without a trust res; the trust res in an unfunded life-insurance trust is the contract right to the proceeds of the life-insurance policy conferred on the trustee by virtue of naming the trustee the beneficiary of the policy. See Gordon v. Portland Trust Bank, 201 Or. 648, 271 P.2d 653 (1954) ("[T]he [trustee as the] beneficiary [of the policy] is the owner of a promise to pay the proceeds at the death of the insured ...."); Gurnett v. Mutual Life Ins. Co., 356 Ill. 612, 191 N.E. 250 (1934). Thus, the term "unfunded life-insurance trust" does not refer to an unfunded trust, but to a funded trust that has not received additional funding. For further indication of the problematic nature of the idea that the original version permits pour-over devises and bequests to unfunded trusts, see Estate of Daniels, 665 P.2d 594 (Colo. 1983) (pour-over devise failed; before signing the trust instrument, the decedent was advised by counsel that the "mere signing of the trust agreement would not activate it and that, before the trust could come into being, [the decedent] would have to fund it;" decedent then signed the trust agreement and returned it to counsel "to wait for further directions on it;" no further action was taken by the decedent prior to death; the decedent's will devised the residue of her estate to the trustee of the trust, but added that the residue should go elsewhere "if the trust created by said agreement is not in effect at my death.")
Additional revisions of this section are designed to remove obstacles to carrying out the testator's intention that were contained in the original version. These revisions allow the trust terms to be set forth in a written instrument executed after as well as before or concurrently with the execution of the will; require the bequeathed or devised property to be administered in accordance with the terms of the trust as amended after as well as before the testator's death, even though the testator's will does not so provide; and allow the testator's will to provide that the devise or bequest is not to lapse even if the trust is revoked or terminated before the testator's death.
Given the fact that the revised and original version of UTATA allow amendments to the receptacle trust to be effective with respect to the poured-over assets even when the amendment was made after execution of the will containing the pour-over bequest or devise, and given the fact that the revised version of UTATA allows the trust document itself to be executed after the execution of the will, testators would be well advised not to use language of incorporation by reference in drafting pour-over devises validated by UTATA.
SECTION 2. EFFECT ON EXISTING WILLS. This [Act] applies to a will of a testator who dies after the effective date of this [Act].
SECTION 3. UNIFORMITY OF APPLICATION AND CONSTRUCTION. This [Act] shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this [Act] among states enacting it.
SECTION 4. SHORT TITLE. This [Act] may be cited as the Uniform Testamentary Additions to Trusts Act (1991).
SECTION 5. SEVERABILITY CLAUSE. If any provision of this [Act] or its application is held invalid, the invalidity does not affect other provisions or applications of this [Act] which can be given effect without the invalid provision or application, and to this end provisions of this [Act] are severable.
SECTION 6. REPEAL. The following acts and parts of acts are repealed:
(a)
(b)
(c)
SECTION 7. EFFECTIVE DATE. This [Act] takes effect _________________________.