ULC

Probate Code Summary

Introduction

The 1991 Uniform Probate Code (UPC 1991) is a nationally recommended and up-to-date model for the improvement of state law relating to the succession of property at an owner's death, as controlled by will, intestacy statute, and the probate process. The UPC has long been applauded for its reform provisions, which are designed to shorten and simplify the probate of estates. Aspects of nonprobate transfers on death are also covered in the UPC, as are guardianships and other protective arrangements for minors and incapacitated adults. The UPC aims to make laws more uniform among the states, and promotes a speedy and efficient system for estate administration.

UPC 1991 replaces an earlier Uniform Probate Code (UPC 1969) that has been enacted in 18 states, and accepted in part in all but a few of the remaining states. The earlier work was the product of an eight-year collaborative effort of the National Conference of Commissioners on Uniform State Laws (ULC), and the Real Property, Probate and Trust Law Section of the American Bar Association (ABA Section). The 1991 revision is the culmination of a systematic study of the Code conducted by the Joint Editorial Board for the Uniform Probate Code (JEB/UPC), an organization representing the ULC, the ABA Section, and the American College of Trust and Estate Lawyers. UPC 1991 also reflects earlier work of the JEB/UPC and ULC drafting committees that revised and expanded the 1969 Code in the 1970s and 1980s.

Probate of Wills and Administration

UPC 1991 essentially repeats UPC 1969's articles on probate procedures (Articles III and IV). These procedures were designed in the 1960s to meet the public demand for quicker and less expensive settlements of decedents' estates. The UPC procedural reforms work very well in the enacting states and have served to reduce delays and public distrust of lawyers and probate courts. This portion of the UPC 1991 enables uncontested estates in probate to be processed with greater safety and as efficiently as estates that are controlled by probate-avoiding living trusts.

The probate procedures of the UPC incorporate concepts like informal (non-judicial) probate, and independent administration of estates (no continuing court supervision). Informal probate can be granted within seven days after a decedent's death, and within seven days after all interested persons have been notified in writing. Independent administration is a method designed for settling estates without court supervision where the heirs are in agreement and no controversies exist.
The court process will continue to be available when there is a dispute, or on the petition of any interested party, or at the direction of the court.

The UPC also sets forth efficient procedures for dealing with an estate with property located in two or more states.

Intestacy, Wills and Donative Transfers

UPC 1991 features important revisions of Article II, which covers the substantive rules of succession under intestate (without will), testate (with will), and nonprobate transfers at death. The 1969 UPC only covered intestate succession, wills, and pay-on-death (POD) accounts. New UPCII includes improved protection for surviving spouses in intestate succession. The elective share provisions are realigned to meet principles of marital property. Antilapse provisions are provided for both devises under wills and nonprobate transfers.

The extension of UPC Article II to nonprobate transfers at death reflects a need to recast state laws to meet problems generated by growing public reliance on living trusts and other will-substitute devices for directing succession of their assets at death. Historically, different rules have governed gifts by wills and gifts by similar trusts and contracts. For example, older rules establish that a gift directed by will in favor of the writer's spouse automatically becomes ineffective if the marriage is ended by divorce. However, the older rules allowed death benefits by nonprobate arrangement, such as life insurance or joint and survivor title, to remain effective in spite of the later divorce, unless specifically canceled. UPC 1991 corrects this problem and others like it arising from death transfer directions that are left unchanged, probably because of oversight or neglect. The new rules operate without imposing new procedural burdens on probate-avoiding transactions and are carefully crafted to avoid imposition of new risks for trustees, insurance companies, and other third parties.

Other major features of the Article II revisions align state inheritance law closer to public expectations, as reflected by recent important changes in family and living patterns. For example, inheritance law has lagged behind the law governing the equitable division of marital assets upon divorce. Under inheritance law, parties to a broken, but still undissolved marriage, take at death as if the marriage were still intact. Until UPC 1991 or comparable legislation corrects the problem, bizarre allocations of marital assets can occur when inheritance rules rather than divorce rules govern. Take, for example, the case of an estranged couple who are about to be divorced. If each "spouse" has a will favoring children by prior marriages, and if one "spouse" dies before the divorce becomes final, equitable division does not apply. Instead, obsolete inheritance law will likely give the survivor an unintended, fixed, forced share of the decedent's probate estate.

Under most present law, only a couple's pre- or post-nuptial contract can avoid the operation of these old inheritance laws. These old laws were written to prevent disinheritance of a spouse in an era before equality for women and frequent second marriages changed societal views regarding marital property rights. Under UPC 1991, a surviving spouse's legally protected share of a deceased spouse's estate is calculated by a formula that takes account of all the survivor's independent means as well as of the length of the marriage. For marriages of 15 or more years, a spouse is guaranteed 50% of the couples' total assets. In contrast, a spouse of a marriage lasting only eight years is guaranteed a 24% share.

Nonprobate Transfers

The Revised Article VI expands the list of legally effective will substitutes. The new article provides for multiple-party deposit accounts and pay-on-death (POD) clauses applying to such accounts. Multiple-party deposit accounts are accounts owned by more than one person, and may be established with POD provisions. A POD provision is nontestamentary and the money passes to the beneficiary without probate.

The 1991 version also improves on earlier coverage of multiple-name bank accounts by inclusion of language encouraging banks and other financial institutions to offer an "agency" account form in addition to POD and joint forms. Using the agency account form, an elderly single person, for example, may establish an account that names another person who can write checks for the owner and assist the owner in account matters, without creating an appearance that the other person is a part owner or is intended to become the full owner of the account at the owner's death. Under most present laws, banks offer only joint accounts to meet these needs, but joint accounts do not serve this purpose well because they imply that the other person becomes the owner of the funds at the owner's death.

Revised UPCVI also has new provisions allowing transfer on death provisions for investment securities.

Guardianship and Protective Proceedings

The UPC 1991 provides for the appointment and supervision of guardians and conservators for minors and incapacitated adults. It provides for guardians of the person and conservators of the estate as separate and distinct offices. No adult can be subjected to a guardianship or conservatorship without a determination of incapacity by a court. All guardians and conservators are subject to the jurisdiction and the supervision of the court.

Trust Administration

The general duty of a trustee is not altered by the UPC. The UPC requires notice of acceptance of trusteeship and accountings to beneficiaries, even in the absence of court proceedings. There is a duty to administer a trust at a place appropriate to its purposes and to its sound, efficient management.

Trusts must be registered under the UPC. A state's court has exclusive jurisdiction over internal affairs of trusts registered in the state in any litigation initiated by interested parties.

The Need for Uniformity

Americans tend to move rather frequently from state to state, as impelled by employment opportunities or interest in a different climate or environs. American family property law, though appropriately reserved for control by the states, plainly should not be as diverse as it is among our several states. A century or more ago, when poor communication and family immobility were the order of the day, intestate succession rules, will forms, rights of spouses in estates of deceased mates, and probate procedures, tended to develop differently from state to state. Once in the law books, old inheritance laws tended to remain unchanged due to lack of public concern and lack of legislative input from any but specialists making a living from their expertise as local law experts.

UPC 1969 marked the first major effort at serious promotion of the policy of uniformity among state family property laws. Its success to date has nurtured a growing acceptance of uniformity as a desirable and achievable goal, and UPC 1991 encourages a greater trend toward useful uniformity of family property law.

It remains true, however, that legislative packages of the size and importance of the UPC are difficult to enact. In some states, gradual alignment of state codes through periodic enactments of portions of the national model may be more likely than full scale enactment of the entire package. Recognizing this, the ULC, working in collaboration with JEB/UPC, has evolved a number of free-standing uniform laws, each of which duplicates a portion of UPC 1991. The free-standing counterpart of UPC Article II is the Uniform Act on Intestacy, Wills, and Donative Transfers, several portions of which are also offered as smaller, free-standing acts. UPC Article V embraces the Uniform Guardianship and Protective Proceedings Act, the Uniform Durable Power of Attorney Act, and is an appropriate receptacle for the Uniform Custodial Trust Act. UPC Article VI is also offered as a trio of separate acts: Uniform Nonprobate Transfers at Death Act; Uniform Multiple-Person Accounts Act; and Uniform TOD Securities Registration Act.