Final
STAFF SUMMARY OF MEETING

COMMITTEE ON JOINT JUDICIARY

Date:02/22/2006
ATTENDANCE
Time:07:43 AM to 08:56 AM
Bacon
Boyd
Place:LSB A
Cadman
Carroll M.
This Meeting was called to order by
Clapp
Representative Carroll T.
Decker
Dyer
This Report was prepared by
Gardner
Jessika Shipley
Gordon
Jahn
Judd
McGihon
Mitchell
Shaffer
Traylor
Witwer
Carroll T.
Grossman
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
Briefing on Uniform Trust Code-


07:44 AM

Michelle Clayton began the presentation by explaining the materials provided to the committee. Ms. Clayton discussed the National Conference of Commissioners on Uniform State Laws' publication entitled "Colorado Uniform Trust Code: The Best Trust Law for Coloradans" (Attachment A). She also provided written testimony and several handouts explaining the different types of trusts available in Colorado (Attachments B-I). She asked the committee to support House Bill 06-1258 and the Colorado Uniform Trust Code (UTC).


07:47 AM

Stan Kent, Colorado Springs trust attorney, spoke in favor of the Colorado UTC. Mr. Kent discussed the progress of the Colorado Bar Association in making improvements to the UTC. Mr. Kent stressed the importance of supplemental needs trusts. He discussed his work with the Association of Retarded Citizens (ARC) and how supplemental needs trusts protect the members of that organization. He stressed that the UTC does not harm creditors or supplemental needs trusts.





07:55 AM

Jim Wade, Denver trust and estate law attorney, spoke in favor of the Colorado UTC. Mr. Wade discussed his background and qualifications in the area of estates and trusts. He spoke about the genesis of House Bill 06-1258 and how it will be beneficial for trustees and beneficiaries in Colorado. Mr. Wade compared the UTC to the Uniform Probate Code, which Colorado currently has on the books. He pointed out that the UTC takes the portions of the Uniform Probate Code (8:00). Mandatory rules. Mr. Wade discussed the areas of the UTC that lean toward protecting trustees and others that provide more protection to beneficiaries or creditors. One major benefit of the UTC to everyone is that if trustees and beneficiaries agree on matters and there are no creditors involved, no court appearance is necessary. This eases the load on court dockets and is less of a burden to other parties. The UTC also allows a trustee to resign with notice to the beneficiary without a court appearance. Mr. Wade also discussed trust interests in dissolution of marriage actions and division of property. He then spoke about abuse of discretion and how that is addressed by the UTC. He stated that the UTC codifies the best portions of trust law in Colorado.


08:10 AM

Mr. Wade continued his discussion with remarks about the ease of modification of a trust and the right of withdrawal of the assets of a trust by a trustee. He discussed transfer of trusts and protection of trustees who arrange the distribution of assets. Mr. Wade also explained the revocable trust and how it is addressed by the UTC.


08:16 AM

Mark Merrick, Colorado Estate Planning Education Council, spoke in opposition to the Colorado UTC. Mr. Merrick provided his qualifications and background in trusts. He provided a lengthy packet of material to the committee explaining the opposition to the UTC (Attachment J). Mr. Merrick stressed his position that the UTC benefits only beneficiaries and does not protect trustees or creditors at all. He believes that the person who established the trust should decide the rules for that trust. The UTC tends to circumvent the intent of the creator of the trust. Mr. Merrick read several letters from opponents of uniformity in trust laws in several other states. He listed opponents to the UTC.


08:30 AM

Eric Solem, estate planning attorney, spoke in opposition to the Colorado UTC. Mr. Solem stated that the UTC does not provide a clear statement of what the law will accomplish. He believes that the law could potentially have unintended consequences. Mr. Solem pointed out specific provisions of the UTC that could be subject to reinterpretation, especially for the original author of a trust. He stressed the fact that the UTC changes common law.


08:37 AM

The witnesses responded to questions from the committee regarding section 5 of the UTC and the areas of controversy. Mr. Merrick spoke at length regarding the problems his organization has with the UTC. Mr. Kent responded to some of Mr. Merrick's concerns and stated that he understands that many 2004 and 2005 amendments are being incorporated into the bill. Mr. Kent discussed settler intent at length in response to a question from the committee. Mr. Wade responded to questions regarding the nature of the trust relationship. Mr. Solem referred the committee to section 504.3 as an example of why the UTC shifts the balance of power away from the trustee. Mr. Merrick referred to sections 111 and 814 for further examples of shifting the balance of power.


08:56 AM

Representative T. Carroll adjourned the meeting.