diff --git a/editor/src/document/document_message_handler.rs b/editor/src/document/document_message_handler.rs
index f8ef8f604..9a758a8bc 100644
--- a/editor/src/document/document_message_handler.rs
+++ b/editor/src/document/document_message_handler.rs
@@ -462,6 +462,16 @@ impl DocumentMessageHandler {
 			self.artboard_message_handler.artboards_graphene_document.viewport_bounding_box(&[]).ok().flatten()
 		}
 	}
+
+	/// Calculate the path that new layers should be inserted to.
+	/// Depends on the selected layers as well as their types (Folder/Non-Folder)
+	pub fn get_path_for_new_layer(&self) -> Vec<u64> {
+		// If the selected layers dont actually exist, a new uuid for the
+		// root folder will be returned
+		let mut path = self.graphene_document.shallowest_common_folder(self.selected_layers()).map_or(vec![], |v| v.to_vec());
+		path.push(generate_uuid());
+		path
+	}
 }
 
 impl PropertyHolder for DocumentMessageHandler {
diff --git a/editor/src/viewport_tools/tools/ellipse.rs b/editor/src/viewport_tools/tools/ellipse.rs
index 6e7886992..312e3e998 100644
--- a/editor/src/viewport_tools/tools/ellipse.rs
+++ b/editor/src/viewport_tools/tools/ellipse.rs
@@ -111,7 +111,7 @@ impl Fsm for EllipseToolFsmState {
 				(Ready, DragStart) => {
 					shape_data.start(responses, input.viewport_bounds.size(), document, input.mouse.position);
 					responses.push_back(DocumentMessage::StartTransaction.into());
-					shape_data.path = Some(vec![generate_uuid()]);
+					shape_data.path = Some(document.get_path_for_new_layer());
 					responses.push_back(DocumentMessage::DeselectAllLayers.into());
 
 					responses.push_back(
diff --git a/editor/src/viewport_tools/tools/freehand.rs b/editor/src/viewport_tools/tools/freehand.rs
index 7e2fe6cbe..2a0c12a7f 100644
--- a/editor/src/viewport_tools/tools/freehand.rs
+++ b/editor/src/viewport_tools/tools/freehand.rs
@@ -148,7 +148,7 @@ impl Fsm for FreehandToolFsmState {
 				(Ready, DragStart) => {
 					responses.push_back(DocumentMessage::StartTransaction.into());
 					responses.push_back(DocumentMessage::DeselectAllLayers.into());
-					data.path = Some(vec![generate_uuid()]);
+					data.path = Some(document.get_path_for_new_layer());
 
 					let pos = transform.inverse().transform_point2(input.mouse.position);
 
diff --git a/editor/src/viewport_tools/tools/line.rs b/editor/src/viewport_tools/tools/line.rs
index f46fd790a..3c8fb0192 100644
--- a/editor/src/viewport_tools/tools/line.rs
+++ b/editor/src/viewport_tools/tools/line.rs
@@ -159,7 +159,7 @@ impl Fsm for LineToolFsmState {
 					data.drag_start = data.snap_handler.snap_position(responses, input.viewport_bounds.size(), document, input.mouse.position);
 
 					responses.push_back(DocumentMessage::StartTransaction.into());
-					data.path = Some(vec![generate_uuid()]);
+					data.path = Some(document.get_path_for_new_layer());
 					responses.push_back(DocumentMessage::DeselectAllLayers.into());
 
 					data.weight = tool_options.line_weight;
diff --git a/editor/src/viewport_tools/tools/pen.rs b/editor/src/viewport_tools/tools/pen.rs
index f6c99d577..b875068a6 100644
--- a/editor/src/viewport_tools/tools/pen.rs
+++ b/editor/src/viewport_tools/tools/pen.rs
@@ -153,7 +153,7 @@ impl Fsm for PenToolFsmState {
 				(Ready, DragStart) => {
 					responses.push_back(DocumentMessage::StartTransaction.into());
 					responses.push_back(DocumentMessage::DeselectAllLayers.into());
-					data.path = Some(vec![generate_uuid()]);
+					data.path = Some(document.get_path_for_new_layer());
 
 					data.snap_handler.start_snap(document, document.visible_layers(), true, true);
 					let snapped_position = data.snap_handler.snap_position(responses, input.viewport_bounds.size(), document, input.mouse.position);
diff --git a/editor/src/viewport_tools/tools/rectangle.rs b/editor/src/viewport_tools/tools/rectangle.rs
index 21e602c10..23751b56a 100644
--- a/editor/src/viewport_tools/tools/rectangle.rs
+++ b/editor/src/viewport_tools/tools/rectangle.rs
@@ -110,7 +110,7 @@ impl Fsm for RectangleToolFsmState {
 				(Ready, DragStart) => {
 					shape_data.start(responses, input.viewport_bounds.size(), document, input.mouse.position);
 					responses.push_back(DocumentMessage::StartTransaction.into());
-					shape_data.path = Some(vec![generate_uuid()]);
+					shape_data.path = Some(document.get_path_for_new_layer());
 					responses.push_back(DocumentMessage::DeselectAllLayers.into());
 
 					responses.push_back(
diff --git a/editor/src/viewport_tools/tools/shape.rs b/editor/src/viewport_tools/tools/shape.rs
index a406db1e0..b6c016804 100644
--- a/editor/src/viewport_tools/tools/shape.rs
+++ b/editor/src/viewport_tools/tools/shape.rs
@@ -151,7 +151,7 @@ impl Fsm for ShapeToolFsmState {
 				(Ready, DragStart) => {
 					shape_data.start(responses, input.viewport_bounds.size(), document, input.mouse.position);
 					responses.push_back(DocumentMessage::StartTransaction.into());
-					shape_data.path = Some(vec![generate_uuid()]);
+					shape_data.path = Some(document.get_path_for_new_layer());
 					responses.push_back(DocumentMessage::DeselectAllLayers.into());
 					data.sides = tool_options.vertices;
 
diff --git a/editor/src/viewport_tools/tools/shared/resize.rs b/editor/src/viewport_tools/tools/shared/resize.rs
index d5a2ed48b..145ed57ae 100644
--- a/editor/src/viewport_tools/tools/shared/resize.rs
+++ b/editor/src/viewport_tools/tools/shared/resize.rs
@@ -15,6 +15,7 @@ pub struct Resize {
 	pub path: Option<Vec<LayerId>>,
 	snap_handler: SnapHandler,
 }
+
 impl Resize {
 	/// Starts a resize, assigning the snap targets and snapping the starting position.
 	pub fn start(&mut self, responses: &mut VecDeque<Message>, viewport_bounds: DVec2, document: &DocumentMessageHandler, mouse_position: DVec2) {
diff --git a/editor/src/viewport_tools/tools/text.rs b/editor/src/viewport_tools/tools/text.rs
index b31b217f2..983aa7ff2 100644
--- a/editor/src/viewport_tools/tools/text.rs
+++ b/editor/src/viewport_tools/tools/text.rs
@@ -246,7 +246,7 @@ impl Fsm for TextToolFsmState {
 					else if state == TextToolFsmState::Ready {
 						let transform = DAffine2::from_translation(input.mouse.position).to_cols_array();
 						let font_size = tool_options.font_size;
-						data.path = vec![generate_uuid()];
+						data.path = document.get_path_for_new_layer();
 
 						responses.push_back(
 							Operation::AddText {