Title 14A, Title 14A: Trusts

§ 1202. Electronic records and signatures The provisions of this title governing the legal effect, validity, or enforceability of electronic records or electronic signatures and of contracts formed or performed with the use of such records or signatures conform to the requirement…

§ 1203. Severability clause If any provision of this title or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this title which can be given effect without the invalid provision or application, and …

§ 1204. Application to existing relationships (a) Except as otherwise provided in this title, on the effective date of this title: (1) this title applies to all trusts created before, on, or after its effective date; (2) this title applies to all judicial proceedings concerning t…

§ 1301. Short title This chapter may be cited as the Uniform Directed Trust Act. (Added 2023, No. 104 (Adj. Sess.), § 1, eff. May 13, 2024.)

§ 1302. Definitions As used in this chapter: (1) “Breach of trust” means a violation by a trust director or trustee of a duty imposed on that director or trustee by the terms of the trust, this chapter, or law of this State other than this chapter pertaining to trusts. (2) “Direc…

§ 1303. Application; principal place of administration (a) Notwithstanding section 1204 of this title, this chapter applies to a trust, whenever created, that has its principal place of administration in this State, subject to the following rules: (1) If the trust was created bef…

§ 1304. Common law and principles of equity The common law and principles of equity supplement this chapter, except to the extent modified by this chapter or laws of this State other than this chapter. (Added 2023, No. 104 (Adj. Sess.), § 1, eff. May 13, 2024.)

§ 1305. Exclusions (a) As used in this section, “power of appointment” means a power that enables a person acting in a nonfiduciary capacity to designate a recipient of an ownership interest in or another power of appointment over trust property. (b) This chapter does not apply t…

§ 1306. Powers of trust director (a) Subject to section 1307 of this title, the terms of a trust may grant a power of direction to a trust director. (b) Unless the terms of a trust provide otherwise: (1) a trust director may exercise any further power appropriate to the exercise …

§ 1307. Limitations on trust director A trust director is subject to the same rules as a trustee in a like position and under similar circumstances in the exercise or nonexercise of a power of direction or further power under subdivision 1306(b)(1) of this title regarding: (1) a …

§ 1308. Duty and liability of trust director (a) Subject to subsection (b) of this section, with respect to a power of direction or further power under subdivision 1306(b)(1) of this title: (1) a trust director has the same fiduciary duty and liability in the exercise or nonexerc…

§ 1309. Duty and liability of directed trustee (a) Subject to subsection (b) of this section, a directed trustee shall take reasonable action to comply with a trust director’s exercise or nonexercise of a power of direction or further power under subdivision 1306(b)(1) of this ti…

§ 1310. Duty to provide information to trust director or trustee (a) Subject to section 1311 of this title, a trustee shall provide information to a trust director to the extent the information is reasonably related both to: (1) the powers or duties of the trustee; and (2) the po…

§ 1311. No duty to monitor, inform, or advise (a) Unless the terms of a trust provide otherwise: (1) a trustee does not have a duty to: (A) monitor a trust director; or (B) inform or give advice to a settlor, beneficiary, trustee, or trust director concerning an instance in which…

§ 1312. Application to cotrustee The terms of a trust may relieve a cotrustee from duty and liability with respect to another cotrustee’s exercise or nonexercise of a power of the other cotrustee to the same extent that in a directed trust a directed trustee is relieved from duty…

§ 1313. Limitation of action against trust director (a) An action against a trust director for breach of trust must be commenced within the same limitation period applicable to an action for breach of trust against a trustee in a like position and under similar circumstances. (b)…

§ 1314. Defenses in action against trust director In an action against a trust director for breach of trust, the director may assert the same defenses a trustee in a like position and under similar circumstances could assert in an action for breach of trust against the trustee. (…

§ 1315. Jurisdiction over trust director (a) By accepting appointment as a trust director of a trust subject to this chapter, the director submits to personal jurisdiction of the courts of this State regarding any matter related to a power or duty of the director. (b) This sectio…

§ 1316. Office of trust director Unless the terms of a trust provide otherwise, the rules applicable to a trustee apply to a trust director regarding the following matters: (1) acceptance under section 701 of this title; (2) giving of bond to secure performance under section 702 …

§ 1317. Uniformity of application and construction In applying and construing this uniform act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it. (Added 2023, No. 104 (Adj. Sess.), § 1, eff. Ma…

§ 1318. Relation to Electronic Signatures in Global and National Commerce Act This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001, but does not modify, limit, or supersede Section 101(c) of that Act, 15 U.S.…

§ 1401. Short title. This chapter may be cited as the Uniform Trust Decanting Act. (Added 2023, No. 177 (Adj. Sess.), § 1, eff. July 1, 2024.)

§ 1402. Definitions As used in this chapter: (1) “Appointive property” means the property or property interest subject to a power of appointment. (2) “Ascertainable standard” has the same meaning as in subdivision 103(2) of this title. (3) “Authorized fiduciary” means: (A) a trus…

§ 1403. Scope (a) Except as otherwise provided in subsections (b) and (c) of this section, this chapter applies to an express trust that is irrevocable or revocable by the settlor only with the consent of the trustee or a person holding an adverse interest. (b) This chapter does …

§ 1404. Fiduciary duty (a) In exercising the decanting power, an authorized fiduciary shall act in accordance with its fiduciary duties, including the duty to act in accordance with the purposes of the first trust. (b) This chapter does not create or imply a duty to exercise the …

§ 1405. Application; governing law This chapter applies to a trust created before, on, or after the effective date of this act that: (1) has its principal place of administration in this State, including a trust whose principal place of administration has been changed to this Sta…

§ 1406. Reasonable reliance A trustee or other person who reasonably relies on the validity of a distribution of part or all of the property of a trust to another trust, or a modification of a trust, under this chapter, law of this State other than this chapter, or the law of ano…

§ 1407. Notice; exercise of decanting power (a) In this section, a notice period begins on the day notice is given under subsection (c) of this section and ends 59 days after the day notice is given. (b) Except as otherwise provided in this chapter, an authorized fiduciary may ex…

§ 1408. Representation (a) Notice to a person with authority to represent and bind another person under a first trust instrument or the Vermont Trust Code has the same effect as notice given directly to the person represented. (b) Consent of or waiver by a person with authority t…

§ 1409. Court involvement (a) The court may, upon application of an authorized fiduciary, a person entitled to notice under subsection 1407(c) of this title, a beneficiary, or, with respect to a charitable interest, the Attorney General or another person with standing to enforce …

§ 1410. Formalities An exercise of the decanting power shall be made in a record signed by an authorized fiduciary. The signed record shall, directly or by reference to the notice required by section 1407 of this title, identify the first trust and the second trust or trusts and …

§ 1411. Decanting power under expanded distributive discretion (a) As used in this section: (1) “Noncontingent right” means a right that is not subject to the exercise of discretion or the occurrence of a specified event that is not certain to occur. The term does not include a r…

§ 1412. Decanting power under limited distributive discretion (a) As used in this section, “limited distributive discretion” means a discretionary power of distribution that is limited to an ascertainable standard or a reasonably definite standard. (b) An authorized fiduciary who…

§ 1413. Trust for beneficiary with disability (a) As used in this section: (1) “Beneficiary with a disability” means a beneficiary of a first trust who the special-needs fiduciary believes may qualify for governmental benefits based on disability, whether or not the beneficiary c…

§ 1414. Protection of charitable interest (a) As used in this section: (1) “Determinable charitable interest” means a charitable interest that is a right to a mandatory distribution currently, periodically, on the occurrence of a specified event, or after the passage of a specifi…

§ 1415. Trust limitation on decanting (a) An authorized fiduciary shall not exercise the decanting power to the extent the first trust instrument expressly prohibits exercise of: (1) the decanting power; or (2) a power granted by State law to the authorized fiduciary to distribut…

§ 1416. Change in compensation (a) If a first-trust instrument specifies an authorized fiduciary’s compensation, the fiduciary shall not exercise the decanting power to increase the fiduciary’s compensation above the specified compensation unless: (1) all qualified beneficiaries …

§ 1417. Relief from liability and indemnification (a) Except as otherwise provided in this section, a second-trust instrument shall not relieve an authorized fiduciary from liability for breach of trust to a greater extent than the first trust instrument. (b) A second-trust instr…

§ 1418. Removal or replacement of authorized fiduciary An authorized fiduciary shall not exercise the decanting power to modify a provision in a first-trust instrument granting another person power to remove or replace the fiduciary unless: (1) the person holding the power consen…

§ 1419. Tax-related limitations (a) As used in this section: (1) “Grantor trust” means a trust as to which a settlor of a first trust is considered the owner under 26 U.S.C. §§ 671–677 or 26 U.S.C. § 679. (2) “Internal Revenue Code” means the U.S. Internal Revenue Code of 1986. (…

§ 1420. Duration of second trust (a) Subject to subsection (b) of this section, a second trust may have a duration that is the same as or different from the duration of the first trust. (b) To the extent that property of a second trust is attributable to property of the first tru…

§ 1421. Need to distribute not required An authorized fiduciary may exercise the decanting power whether or not under the first trust’s discretionary distribution standard the fiduciary would have made or could have been compelled to make a discretionary distribution of principal…

§ 1422. Savings provision (a) If exercise of the decanting power would be effective under this chapter except that the second-trust instrument in part does not comply with this chapter, the exercise of the power is effective and the following rules apply with respect to the princ…

§ 1423. Trust for care of animal (a) As used in this section: (1) “Animal trust” means a trust or an interest in a trust created to provide for the care of one or more animals. (2) “Protector” means a person appointed in an animal trust to enforce the trust on behalf of the anima…

§ 1424. Terms of second trust A reference in the Vermont Trust Code to a trust instrument or terms of the trust includes a second-trust instrument and the terms of the second trust. (Added 2023, No. 177 (Adj. Sess.), § 1, eff. July 1, 2024.)

§ 1425. Settlor (a) For purposes of the law of this State other than this chapter and subject to subsection (b) of this section, a settlor of a first trust is deemed to be the settlor of the second trust with respect to the portion of the principal of the first trust subject to t…