CSG Includes Two Uniform Acts as Shared State Legislation

(September 14, 2018) -

Uniform Law Commission
111 N. Wabash Ave., Suite 1010, Chicago, IL  60602
312-450-6600, www.uniformlaws.org

Contact: Katie Robinson, ULC Communications Officer, krobinson@uniformlaws.org

For Immediate Release:


September 14, 2018 – Two uniform acts were approved for inclusion in the Council of State Governments’ (CSG) “Shared State Legislation” compilation at the CSG SSL’s recent meeting in Snowbird, Utah.  The Uniform Protected Series Act and the Uniform Directed Trust Act – included as “shared state legislation” – were drafted and approved by the Uniform Law Commission (ULC).

The Uniform Directed Trust Act (UDTA) addresses the rise of directed trusts. In a directed trust, a person other than a trustee has a power over some aspect of the trust’s administration. Such a person may be called a “trust protector,” “trust adviser,” or in the terminology of the UDTA, a “trust director.” The division of authority between a trust director and a trustee raises difficult questions about how to divide fiduciary power and duty. The Uniform Directed Trust Act provides clear, functional rules that allow a settlor to freely structure a directed trust while preserving key fiduciary safeguards for beneficiaries. The UDTA also provides sensible default rules for a variety of matters that might be overlooked in the drafting of a directed trust, including information sharing among trustees and trust directors, the procedures for accepting appointment as a trust director, the distinction between a power of direction and a nonfiduciary power of appointment, and many other matters.  The UDTA was approved by the ULC in 2017 and has been adopted in two states:  Georgia and New Mexico.

The Uniform Protected Series Act provides a comprehensive framework for the formation and operation of a protected series limited liability company. A protected series LLC has both “horizontal” liability shields, as well as the standard “vertical” liability shield.  All modern business entities provide the traditional, “vertical” shield – protecting the entity’s owners (and their respective assets) from automatic, vicarious liability for the entity’s debts.  A “series” limited liability company provides “horizontal” shields – protecting each protected series (and its assets) from automatic, vicarious liability for the debts of the company and for the debts of any other protected series of the company.  A horizontal shield likewise protects the series limited liability company (and its assets) from creditors of any protected series of the company.  About 15 jurisdictions have some kind of series statute, but they vary widely. The Act integrates into any existing LLC Act, whether it is the Uniform Limited Liability Company Act or not.  The UPSA was approved by the ULC in 2017 and has been adopted in one state:  Nebraska.

Further information on each of these Uniform Acts can be found at the ULC’s website at www.uniformlaws.org.  

What is Shared State Legislation (SSL)?
Launched in 1941, the Council of State Governments’ Shared State Legislation–or SSL–program, previously known as Suggested State Legislation, is both a member-driven process and an annual publication detailing topics of current importance to the states. The CSG SSL Committee, comprised exclusively of state officials, meets twice annually to review legislation adopted in the states. The committee then selects legislation to be included in the annual SSL volume. These volumes are published online for dissemination to state leaders and staff.

CSG does not promote or advocate for the enactment of state legislation, nor does it draft model legislation. Rather, the program’s goal is to facilitate the sharing of legislative ideas among CSG members. The consideration or dissemination of such legislation by the SSL Committee does not constitute an endorsement nor will CSG advocate for the enactment of any such legislation in any member jurisdictions

About the Uniform Law Commission
The Uniform Law Commission is comprised of more than 350 practicing lawyers, governmental lawyers, judges, law professors and lawyer-legislators, who are appointed by each state, the District of Columbia, Puerto Rico and the U.S. Virgin Islands to research, draft and promote enactment of uniform state laws in areas of state laws where uniformity is desirable and practical.  Now in its 127th year, the ULC has provided states with over 250 uniform acts that help bring clarity and stability to critical areas of state statutory law.

About the Council of State Governments
Founded in 1933, the Council of State Governments is the country’s only organization serving all three branches of state government.  CSG is a region-based forum that fosters the exchange of insights and ideas to help state officials shape public policy. This offers unparalleled regional, national and international opportunities to network, develop leaders, collaborate and create problem-solving partnerships.