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The Vermont Statutes Online

 

Title 14A: Trusts

Chapter 007: OFFICE OF TRUSTEE

  • § 701. Accepting or declining trusteeship

    (a) Except as otherwise provided in subsection (c) of this section, a person designated as trustee accepts the trusteeship:

    (1) by substantially complying with a method of acceptance 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 accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship.

    (b) A person designated as trustee who has not yet accepted the trusteeship may reject the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable time after knowing of the designation is deemed to have rejected the trusteeship.

    (c) A person designated as trustee, without accepting the trusteeship, may:

    (1) act to preserve the trust property if, within a reasonable time after acting, the person sends a rejection of the trusteeship to the settlor or, if the settlor is dead or lacks capacity, to the designated cotrustee, or, if none, to the successor trustee, or, if none, to a qualified beneficiary; and

    (2) inspect or investigate trust property to determine potential liability under environmental or other law or for any other purpose. (Added 2009, No. 20, § 1.)

  • § 702. Trustee's bond

    (a) A trustee shall give bond to secure performance of the trustee's duties only if the Probate Division of the Superior Court finds that a bond is required by the terms of the trust and the Probate Division of the Superior Court has not dispensed with the requirement, or the Probate Division of the Superior Court finds by clear and convincing evidence that a bond is needed to protect the interests of the beneficiaries.

    (b) The Probate Division of the Superior Court may specify the amount of a bond, its liabilities, and whether sureties are necessary. The Probate Division of the Superior Court may modify or terminate a bond at any time. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)

  • § 703. Cotrustees

    (a) Cotrustees who are unable to reach a unanimous decision may act by majority decision.

    (b) If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the trust.

    (c) A cotrustee must participate in the performance of a trustee's function unless the cotrustee is unavailable to perform the function because of absence, illness, disqualification under other law, or other temporary incapacity, or the cotrustee has properly delegated the performance of the function to another trustee.

    (d) If a cotrustee is unavailable to perform duties because of absence, illness, disqualification under other law, or other temporary incapacity, and prompt action is necessary to achieve the purposes of the trust or to avoid injury to the trust property, the remaining cotrustee or a majority of the remaining cotrustees may act for the trust.

    (e) A trustee may not delegate to a cotrustee the performance of a function the settlor reasonably expected the trustees to perform jointly. Unless a delegation was irrevocable, a trustee may revoke a delegation previously made.

    (f) Except as otherwise provided in subsection (g) of this section, a trustee who does not join in an action of another trustee is not liable for the action.

    (g) Each trustee shall exercise reasonable care to:

    (1) prevent a cotrustee from committing a serious breach of trust; and

    (2) compel a cotrustee to redress a serious breach of trust.

    (h) A dissenting trustee who joins in an action at the direction of the majority of the trustees and who notified in writing any cotrustee of the dissent at or before the time of the action is not liable for the action unless the action is a serious breach of trust. (Added 2009, No. 20, § 1.)

  • § 704. Vacancy in trusteeship; appointment of successor

    (a) A vacancy in a trusteeship occurs if:

    (1) a person designated as trustee rejects the trusteeship;

    (2) a person designated as trustee cannot be identified or does not exist;

    (3) a trustee resigns;

    (4) a trustee is disqualified or removed;

    (5) a trustee dies; or

    (6) a guardian is appointed for an individual serving as trustee.

    (b) If one or more cotrustees remain in office, a vacancy in a trusteeship need not be filled. A vacancy in a trusteeship must be filled if the trust has no remaining trustee.

    (c) A vacancy in a trusteeship of a noncharitable trust that is required to be filled must be filled in the following order of priority:

    (1) by a person designated in the terms of the trust to act as successor trustee;

    (2) by a person appointed by unanimous agreement of the qualified beneficiaries; or

    (3) by a person appointed by the Probate Division of the Superior Court.

    (d) A vacancy in a trusteeship of a charitable trust that is required to be filled must be filled in the following order of priority:

    (1) by a person designated in the terms of the trust to act as successor trustee; or

    (2) by a person appointed by the Probate Division of the Superior Court.

    (e) Whether or not a vacancy in a trusteeship exists or is required to be filled, the Probate Division of the Superior Court may appoint an additional trustee or special fiduciary whenever the Probate Division of the Superior Court considers the appointment necessary for the administration of the trust. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)

  • § 705. Resignation of trustee

    (a) A trustee may resign:

    (1) upon at least 30 days' notice in writing to all cotrustees and to the qualified beneficiaries except those qualified beneficiaries under a revocable trust which the settlor has the capacity to revoke; or

    (2) with the approval of the Probate Division of the Superior Court.

    (b) In approving a resignation, the Probate Division of the Superior Court may issue orders and impose conditions reasonably necessary for the protection of the trust property.

    (c) Any liability of a resigning trustee or of any sureties on the trustee's bond for acts or omissions of the trustee is not discharged or affected by the trustee's resignation. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. Feb. 1, 2011.)

  • § 706. Removal and replacement of trustee

    (a) The settlor, a cotrustee, or a beneficiary may request the probate division of the superior court to remove a trustee under subsection (b) of this section or to replace a trustee under subsection (c) of this section. A trustee may be removed by the Probate Division of the Superior Court on its own initiative.

    (b) The Probate Division of the Superior Court may remove a trustee if:

    (1) the trustee is obviously unsuitable;

    (2) the trustee has committed a serious breach of trust;

    (3) lack of cooperation among cotrustees substantially impairs the administration of the trust;

    (4) because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries;

    (5) there has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the Probate Division of the Superior Court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available;

    (6) for any cause, if the interests of the trust estate require it.

    (c) The Probate Division of the Superior Court may remove an existing trustee, and appoint a replacement trustee subject to the provisions of section 704 of this title, if the Probate Division of the Superior Court finds that a change in trustee would be in keeping with the intent of the settlor. In deciding whether to replace a trustee under this subsection, the Probate Division of the Superior Court may consider the following factors:

    (1) Whether removal would substantially improve or benefit the administration of the trust;

    (2) The relationship between the settlor and the trustee as it existed at the time the trust was created;

    (3) Changes in the nature of the trustee since the creation of the trust;

    (4) The relationship between the trustee and the beneficiaries;

    (5) The responsiveness of the trustee to the beneficiaries;

    (6) The experience and skill level of the trustee;

    (7) The investment performance of the trustee;

    (8) The charges for services performed by the trustee; and

    (9) Any other relevant factors pertaining to the administration of the trust.

    (d) A Probate Division of the Superior Court may order trustees who are replaced pursuant to an action brought under subsection (c) of this section to reimburse the trust for attorney's fees and court costs paid by the trust relating to the action.

    (e) Pending a final decision on a request to remove a trustee, or in lieu of or in addition to removing a trustee, the Probate Division of the Superior Court may order such appropriate relief under subsection 1001(b) of this title as may be necessary to protect the trust property or the interests of the beneficiaries. (Added 2009, No. 20, § 1; amended 2009, No. 92 (Adj. Sess.), § 8; 2009, No. 154 (Adj. Sess.), § 236, eff. Feb.1, 2011.)

  • § 707. Delivery of property by former trustee

    (a) Unless a cotrustee remains in office or the Probate Division of the Superior Court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to it, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property.

    (b) A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property within the trustee's possession to the cotrustee, successor trustee, or other person entitled to it. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)

  • § 708. Compensation of trustee

    (a) If the terms of a trust do not specify the trustee's compensation, a trustee is entitled to compensation that is reasonable under the circumstances.

    (b) If the terms of a trust specify the trustee's compensation, the trustee is entitled to be compensated as specified, but the Probate Division of the Superior Court may allow more or less compensation if:

    (1) the duties of the trustee are substantially different from those contemplated when the trust was created; or

    (2) the compensation specified by the terms of the trust would be unreasonably low or high.

    (c)(1) Factors for the Probate Division of the Superior Court to consider in deciding upon a trustee's compensation shall include:

    (A) the size of the trust;

    (B) the nature and number of the assets;

    (C) the results obtained;

    (D) the time and responsibility required;

    (E) the expertise required;

    (F) any management or sale of real property or closely held business interests;

    (G) any involvement in litigation to protect the trust property;

    (H) the fee customarily charged in the locality for similar services;

    (I) the experience, reputation, and ability of the person performing the services;

    (J) the effect that the particular employment may have on the ability of the person employed to engage in other employment;

    (K) the time limitations imposed by the trustee or by the circumstances; and

    (L) other relevant factors.

    (2) The order of the factors in this subsection does not imply their relative importance. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)

  • § 709. Reimbursement of expenses

    (a) A trustee is entitled to be reimbursed out of the trust property, with reasonable interest as appropriate, for:

    (1) expenses that were properly incurred in the administration of the trust; and

    (2) to the extent necessary to prevent unjust enrichment of the trust, expenses that were not properly incurred in the administration of the trust.

    (b) An advance by the trustee of money for the protection of the trust gives rise to a lien against trust property to secure reimbursement with reasonable interest. (Added 2009, No. 20, § 1.)