The Nebraska Uniform Trust Code: Nebraska Trust Law in Transition

• Publication year: 2022

37 Creighton L. Rev. 61. THE NEBRASKA UNIFORM TRUST CODE: NEBRASKA TRUST LAW IN TRANSITION

Creighton Law Review

Vol. 37

RONALD R. VOLKMER(fn*)

I. INTRODUCTION

Nebraska lawyers now face the reality of a changed world of Nebraska trust law with the passage of LB 130(fn1) during the Ninetyeighth Legislature, First Session. LB 130 enacts the Nebraska Uniform Trust Code ("Nebraska UTC") an event comparable to the passage of LB 354 in 1974 that brought the Uniform Probate Code to Nebraska. LB 354(fn2) stipulated an operative date of January 1, 1977,(fn3) in order to allow Nebraska lawyers sufficient time to acquaint themselves with the new Nebraska Probate Code. In a similar fashion, LB 130 provides for an operative date of January 1, 2005,(fn4) with the hope that Nebraska lawyers will have sufficient lead time to educate themselves in regard to the particulars of the new trust code. The operative date of January 1, 2005, also allows additional time to make further legislative changes in 2004 to the Nebraska UTC if changes are deemed necessary.

The education process for Nebraska lawyers can and will take various forms. The Nebraska State Bar Association's Real Property, Probate and Trust Section and Continuing Legal Education Committee co-sponsored a one day seminar on November 14, 2003,(fn5) and other seminars are being scheduled. This issue of the Creighton Law Review features two articles on the Nebraska UTC. Both articles cover the same topic and present a practitioner's perspective and an academic's perspective. The articles share a similar goal in focusing upon the Nebraska UTC with a view towards placing the Nebraska UTC in the context of what had been the pre-existing trust law of the State of Nebraska.

The Lindsay article(fn6) presents a fairly comprehensive overview of the Nebraska UTC from the practitioner's perspective. This article presents a slightly different perspective in that its purposes are: (1) to place the Nebraska UTC in the context of national developments; (2) to highlight resources available for those interested in further researching the Uniform Trust Code ("UTC"); (3) to provide a short history of how the Nebraska UTC became law; and (4) to review some of the Nebraska UTC topics that are likely to be the most significant as debate continues over the changes wrought by the Nebraska UTC. The Lindsay article and this article were designed by their authors to be complementary offering differing perspectives of the Nebraska UTC, but both focusing on the more practical aspects of drafting documents in the context of the new legislation.

As an academic, I have to state the obvious: There is no substitute for reading the statutory language of the Nebraska UTC. The Lindsay article has a "recommended reading order"(fn7) which should be helpful for those unfamiliar with the Nebraska UTC. This "road map" re-emphasizes the point first made: Paying critical and careful attention to the language of the statutes is the first and most important recommendation that both William Lindsay, Jr. and I agree upon.

What this article will not do is duplicate or repeat the discussions and commentaries that have been occurring nationally on provisions of the UTC as promulgated by the National Conference of Commissioners on Uniform State Laws. This article will reference some of these articles, but the focus of this article is not to join the nationwide debate over UTC policy choices. My focus, like that of William Lindsay, Jr. is to concentrate upon the Nebraska UTC and the impact it will have upon Nebraska lawyers, particularly in the context of a Nebraska lawyer who drafts trusts. Having stated that as my main goal, I nonetheless want to place the enactment of the Nebraska UTC within a national perspective, a topic to which I now turn.

II. THE NATIONAL PERSPECTIVE

A. WHAT'S IN A NAME? THE "PURE" UTC

The National Conference of Commissioners on Uniform State Laws ("NCCUSL") approved the Uniform Trust Code ("UTC") at its annual conference in the summer of 2000.(fn8) Professor David English, the Reporter for the UTC, in a recent article discussing the Kansas Uniform Trust Code, refers to the UTC, promulgated by the NCCUSL, as the "pure UTC."(fn9) The 2000 version of the UTC has been the subject of modifications in the years 2001 and 2003 (about which more will be said later). Although it may be common to refer to the Uniform Trust Code as the Uniform Trust Code, it is probable that references to "the" Uniform Trust Code or to the "pure" Uniform Trust Code are to the current version of the Uniform Trust Code as promulgated by the NCCUSL. In this article references to the "UTC" will be to the UTC as amended in 2001.

B. THE EVOLUTION OF THE UTC

The origins of the UTC go back to 1993 when the NCCUSL appointed a study committee to investigate the drafting of a comprehensive trust act. This in turn led, in 1994, to the appointment of a committee to draft a uniform trust act, with Professor David English serving as Reporter. It was a six year process whereby the work of this committee culminated in the UTC. During this period, the drafting committee sought extensive input from various groups and constituencies.(fn10)

During the late 1990's there were other significant projects in progress that also addressed the law of trusts. The American Law Institute ("ALI") was proceeding apace with the drafting of the Restatement (Third) of Trusts and the Restatement (Third) of Property: Wills and Other Donative Transfers. The UTC drafters worked in close coordination with the drafters of these two ALI projects.(fn11) The late 1990s were thus a period in which there was an ongoing national discussion on the law of trusts by prominent academics and practitioners. Given the extensive dialogue and discussion preceding its adoption, it is fair to state that the UTC represented the emerging national consensus (if any there can be).

Despite the intensive scrutiny that the UTC received during the drafting stages, the NCCUSL's approval of the UTC in 2000 did not end the process of review. The NCCUSL subsequently approved changes in 2001(fn12) and in 2003(fn13) to the originally approved 2000 ver-sion. And so, when Nebraska adopted its version of the UTC in 2003, the UTC had undergone a ten year odyssey on the national level during which it had been conceived, crafted, and refined. I think it is important for anyone reviewing Nebraska's version of the UTC to have some appreciation for the evolutionary developments that had preceded it at the national level.

C. AVAILABLE RESOURCES

There are many easily accessible resources available to those researching the UTC. The NCCUSL website contains a wealth of information about the UTC.(fn14) In addition, the NCCUSL has recently created a website devoted exclusively to the UTC.(fn15) One of the features of the latter website is a specialized publication entitled "UTC Notes," containing the most recent information regarding UTC developments. In the more traditional vein of legal scholarship, there are a number of excellent law review articles addressing the UTC generally(fn16) and specific topics covered by the UTC.(fn17)

In the manner of other uniform acts, each of the UTC sections are followed by official comments. The various comments are extremely valuable in that they oftentimes give the history and/or background of the preceding section. Indeed, with some sections, it is tempting to say that the section is the "bones" and the comment is the "meat." However alluring the comments to the sections might be, the comments are not the statutes. That is not to say, however, that a court might not resort to the comments in interpreting a UTC section.

Recall that the UTC was drafted contemporaneously with two ALI projects the drafting of the Restatement (Third) of Trusts and the Restatement (Third) of Property: Wills and Other Donative Trans-fers.(fn18) According to the Reporter for the UTC "the Restatement provides a wealth of background materials for interpreting the language of the UTC."(fn19) He further points out that "several sections of the UTC are patterned on the Restatement (Third) of Property."(fn20) Thus, these other authorities provide additional background materials that may be helpful in evaluating the history and context of certain UTC sections.

When it comes to the Nebraska UTC, an excellent research tool is currently available. I concur with William Lindsay, Jr.'s view that, when it comes to researching the Nebraska UTC, the starting point is the report of the interim study committee called Comments and Recommendations for Enactment of a Nebraska Uniform Trust Code(fn21).Both William J. Lindsay, Jr. and I contributed to that work, and participated in the study that produced it, so we are hardly unbiased in recommending it. On the other hand, the interim study was specifically designed as a research tool and was not written as an advocacy brief. The interim study will be discussed in further detail infra.

D. STATES ADOPTING

The states bordering Nebraska on the east (Iowa) and on the south (Kansas) deserve special mention for different reasons. In 1999, while the UTC was still in draft form, the Iowa legislature passed a comprehensive trust code(fn22) that bears some resemblance to the UTC, but the Iowa Trust Code is a state specific trust code, like that of some other states, and does not contain...