Fifty Ways to Leave Your Lover (or Fifty Ways to Plan, Administer and Litigate Estates)

by Carol Warnick

As the old song by Paul Simon contemplates, there are fifty ways to leave your lover, and there are also fifty ways to plan, administer and litigate estates and trusts.  I have recently become aware of various situations in which attorneys assume that because things are done a certain way in the state in which they practice, they are done the same way in other states.

I am licensed in three states, Colorado, Utah and Wyoming, and deal regularly with the significant differences between them.  For example, Colorado tends to use “by representation” in dealing with passing assets down the generations, but Utah and Wyoming both use “per stirpes.” 

I find the assumption of sameness is particularly acute when both states have adopted the same uniform act.  But states vary widely in their own adaptations of uniform acts.  One example is the Uniform Principal and Income Act (“UPIA”).  I had occasion to deal with the allocation of principal and income with depleting assets such as royalty or working interests in minerals, and found the following to be true in the three states where I practice:

Utah – 90% goes to principal and 10% to income

Wyoming – 27% goes to principal and 73% to income

Colorado – uses a complicated formula clause provided in the statute

Those allocations have very disparate results, depending on which state’s UPIA applies.

Colorado and Utah are both Uniform Probate Code (“UPC”) states, although there are subtle but significant differences in the provisions of the uniform act that have been adopted in both states.  Wyoming’s probate code was based upon California’s probate code when it was adopted and is very different from UPC states.

Utah and Wyoming both have adopted the Uniform Trust Code (“UTC”), again with sometimes subtle and sometimes significant differences in parts of the act.  Colorado will likely be considering the UTC this coming year, but if adopted it will likely be with many changes from what its neighbors have adopted.

In Colorado, real property being transferred into a trust is transferred directly to the trust, with no mention of the trustee except in the Statement of Authority filed with the deed.  In Utah and Wyoming, along with most other states I have researched, the transfer is made to the trustee of the trust in his or her capacity as trustee.  There are negative consequences in all states for failing to transfer the property in the correct way.

In estate and trust litigation, burden of proof, interpretative case law, and court procedures all vary widely between states.  I had the occasion to notice recently how much more detailed one state’s Rules of Civil Procedure are than another state’s rules, even though the rule numbering is the same.

The moral of the story is for us to stop making assumptions that the way things are done in one state is the way things are done in another state, even one that has adopted the same uniform act.  The better assumption is that every state is different, at least until proven otherwise.  Take the time to check the applicable statutes or better yet, contact an attorney in that state for assistance.