[WSBAPT] New Uniform Custodial Trust Act SB 5037

[Nick Pleasants]

Hi Eric,
As chair of the WSBA Elder Law Section, I reviewed the bill when it was introduced earlier this year. It was a little surprising to see it come up now, as the UCTA has been around since 1987. I read this law review article from 1989, attached and available as a free download (http://scholarship.richmond.edu/lawreview/vol24/iss1/5), which discusses the UCTA as an alternative to guardianship. The UCTA somewhat parallels the UTMA, but for adults instead of minors. "Like the UTMA, the UCTA allows any kind of property to be transferred toa custodial trustee." See that article at page 75. If you look at the UCTA as published by the ULC, also attached, there are a lot of comments discussing the similarities and differences between the UTMA and UCTA.
I don't think I would use the UCTA in my practice, but to answer your question, I think the use case is similar to drafting a Revocable Living Trust in which the grantor is not the trustee but retains the control to amend and revoke the trust. If you think about it from an Elder Law perspective, maybe someone with beginning stage dementia might want to use something like this as an alternative to guardianship.
Best,
Nick


Nicholas Pleasants | Shareholder



[OseranHahnAttyatLaw 8]



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________________________________
From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Eric Nelsen <eric at sayrelawoffices.com>
Sent: Tuesday, July 29, 2025 3:16 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] New Uniform Custodial Trust Act SB 5037


Can anybody tell me what the point is of the new Uniform Custodial Trust Act, SB 5037? (It’s effective as of July 27 and is supposed to be a new chapter in Title 11 but I don’t see that it has been codified yet.)

https://app.leg.wa.gov/billsummary?BillNumber=5037&Initiative=False&Year=2025



I get that it allows transfer of property to a trustee for the benefit of a beneficiary. But I don’t see any spendthrift provision, and Sec. 2(5) appears to state that the beneficiary can terminate the trust at any time, at will:



(5) The beneficiary, if not incapacitated, or the conservator of an incapacitated beneficiary, may terminate a custodial trust by delivering to the custodial trustee a writing signed by the beneficiary or conservator declaring the termination. If not previously terminated, the custodial trust terminates on the death of the beneficiary.



If the beneficiary has the power to unilaterally terminate the trust at any time, how is this any different than simply giving the property to the beneficiary free of trust? Is there an EP or other advantage here that I’m not seeing, or am I misreading the statute?



Sincerely,



Eric



Eric C. Nelsen

Sayre Law Offices, PLLC

1417 31st Ave South

Seattle WA 98144-3909

206-625-0092

eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>


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