The Vermont Statutes Online

Title 14A: Trusts

Chapter 006: Revocable Trusts

• § 601. Capacity of settlor of revocable trust

  The capacity of a settlor required to create, amend, revoke, or add property to a revocable trust, or to direct the actions of the trustee of a revocable trust, is the same as that required to make a will. (Added 2009, No. 20, § 1.)

• § 602. Revocation or amendment of revocable trust

  (a) Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust. This subsection does not apply to a trust created under an instrument executed before the effective date of this title.

  (b) If a revocable trust is created or funded by more than one settlor:

  (1) to the extent the trust consists of community property or property held by tenants by the entirety when added to the trust, the trust may be revoked by either spouse acting alone but may be amended only by joint action of both spouses;

  (2) to the extent the trust consists of property other than community property or property held by tenants by the entirety when added to the trust, each settlor may revoke or amend the trust with regard to the portion of the trust property attributable to that settlor’s contribution; and

  (3) upon the revocation or amendment of the trust by fewer than all of the settlors, the trustee shall notify the other settlors of the revocation or amendment.

  (c) The settlor may revoke or amend a revocable trust:

  (1) by substantial compliance with a method provided in the terms of the trust; or

  (2) if the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, by:

  (A) executing a later will or codicil that expressly refers to and revokes or amends the trust or specifically devises or bequeaths specific property that would otherwise have passed according to the terms of the trust, or

  (B) any other method manifesting clear and convincing evidence of the settlor’s intent.

  (d) Upon revocation of a revocable trust, the trustee shall deliver the trust property as the settlor directs, but with respect to community property or property held by tenants by the entirety when added to the trust under subdivision (b)(1) of this section, the trustee shall deliver one half of the property to each spouse unless the governing instrument specifically states otherwise.

  (e) A settlor’s powers with respect to revocation, amendment, or distribution of trust property may be exercised by an agent under a power of attorney only to the extent expressly authorized by the terms of the trust or the power.

  (f) A guardian of the property of the settlor or, if no guardian of the property has been appointed, a guardian of the person of the settlor may exercise a settlor’s powers with respect to revocation, amendment, or distribution of trust property only with the approval of the Probate Division of the Superior Court supervising the guardianship.

  (g) A trustee who does not have actual knowledge that a trust has been revoked or amended is not liable for distributions made and other actions taken on the assumption that the trust had not been amended or revoked. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)

• § 603. Settlor’s powers; powers of withdrawal

  (a) While a trust is revocable, rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.

  (b) During the period the power may be exercised, the holder of a power of withdrawal has the rights of a settlor of a revocable trust under this section to the extent of the property subject to the power. (Added 2009, No. 20, § 1.)

• § 604. Limitation on action contesting validity of revocable trust; distribution of trust property

  (a) A person may commence a judicial proceeding to contest the validity of a trust that was revocable immediately before the settlor’s death within the earlier of:

  (1) three years after the settlor’s death; or

  (2) four months after the trustee sent the person a copy of the trust instrument and a notice informing the person of the trust’s existence, of the trustee’s name and address, and of the time allowed for commencing a proceeding.

  (b) Upon the death of the settlor of a trust that was revocable immediately before the settlor’s death, the trustee may proceed to distribute the trust property in accordance with the terms of the trust. The trustee is not subject to liability for doing so unless:

  (1) the trustee has actual knowledge of a pending judicial proceeding contesting the validity of the trust; or

  (2) a potential contestant has notified the trustee in writing of a possible judicial proceeding to contest the trust, and a judicial proceeding is commenced within 60 days after the contestant sent the notification.

  (c) A beneficiary of a trust that is determined to have been invalid in whole or in part is liable to return any distribution received to the extent that the invalidity applies to the distribution. (Added 2009, No. 20, § 1.)