Section 12.38 National Conference of Commissioners on Uniform State Laws Comments for Uniform Custodial Trust Act

• Library: Trusts and Powers 2013 Supp

C. (§12.38) National Conference of Commissioners on Uniform State Laws Comments for Uniform Custodial Trust Act

The following is a partial presentation of the comments of the UCTA drafting committee appointed by the National Conference of Commissioners on Uniform State Laws. The complete UCTA and drafting committee comments are published in 7A pt. 1 U.L.A. 104–05 (2002). This comment section can also be found online at:

www.law.upenn.edu/bll/ulc/fnact99/ucta87.htm

Prefatory Note to UCTA

This Uniform Act provides for the creation of a statutory custodial trust for adults to be governed by the provisions of the Act whenever property is delivered to another “as custodial trustee under the (Enacting state) Uniform Custodial Trust Act.” The provisions of this Act are based on trust analogies to concepts developed and used in establishing custodianships for minors under the Uniform Transfers to Minors Act (UTMA). The Custodial Trust Act is designed to provide a statutory standby inter vivos trust for individuals who typically are not very affluent or sophisticated, and possibly represented by attorneys engaged in general rather than specialized estate practice. The most frequent use of this trust would be in response to the commonly occurring need of elderly individuals to provide for the future management of assets in the event of incapacity. The statute will also be available for accomplishing distribution of funds by judgment debtors and others to incapacitated persons for whom a conservator has not been appointed. Since this Act allows any person, competent to transfer property, to create custodial trusts for the benefit of themselves or others, with the beneficial interest in custodial trust property in the beneficiary and not in the custodial trustee, its potential for use is extensive. Although the most frequent use probably will be by elderly persons, it is also available for a parent to establish a custodial trust for an adult child who may be incapacitated; for adult persons in the military, or those leaving the country temporarily, to place their property with another for management without relinquishing beneficial ownership of their property; or for young people who have received property under the Uniform Transfers to Minors Act to continue a custodial trust as adults in order to obtain the benefit and convenience of management services performed by the custodial trustee.

This Act follows the approach taken by the Uniform Transfers to Minors Act and allows any kind of property, real or personal, tangible or intangible, to be made the subject of a transfer to a custodial trustee for the...