The Vermont Statutes Online

Title 14A: Trusts

Chapter 011: Trusts Protectors and Trust Advisors

• § 1101. Trust advisors and trust protectors

  (a) A trust protector or trust advisor is any person, other than a trustee, who under the terms of the trust, an agreement of the qualified beneficiaries authorized by the terms of the trust, or a court order has a power or duty with respect to a trust, including, without limitation, one or more of the following powers:

  (1) the power to modify or amend the trust instrument to achieve favorable tax status or respond to changes in any applicable federal, State, or other tax law affecting the trust, including any rulings, regulations, or other guidance implementing or interpreting such laws;

  (2) the power to amend or modify the trust instrument to take advantage of changes in the rule against perpetuities, laws governing restraints on alienation, or other State laws restricting the terms of the trust, the distribution of trust property, or the administration of the trust;

  (3) the power to appoint a successor trust protector or trust advisor;

  (4) the power to review and approve a trustee’s trust reports or accountings;

  (5) the power to change the governing law or principal place of administration of the trust;

  (6) the power to remove and replace any trust advisor or trust protector for the reasons stated in the trust instrument;

  (7) the power to remove a trustee, cotrustee, or successor trustee for the reasons stated in the trust instrument, and to appoint a successor;

  (8) the power to consent to a trustee’s or cotrustee’s action or inaction in making distributions to beneficiaries;

  (9) the power to increase or decrease any interest of the beneficiaries in the trust, to grant a power of appointment to one or more trust beneficiaries, or to terminate or amend any power of appointment granted in the trust; however, a modification, amendment, or grant of a power of appointment may not grant a beneficial interest in a charitable trust with only charitable beneficiaries to any noncharitable interest or purpose and may not grant a beneficial interest in any trust to the trust protector or trust advisor or to the estate or for the benefit of the creditors of such trust protector or such trust advisor;

  (10) the power to perform a specific duty or function that would normally be required of a trustee or cotrustee;

  (11) the power to advise the trustee or cotrustee concerning any beneficiary;

  (12) the power to consent to a trustee’s or cotrustee’s action or inaction relating to investments of trust assets; and

  (13) the power to direct the acquisition, disposition, or retention of any trust investment.

  (b) The exercise of a power by a trust advisor or a trust protector shall be exercised in the sole and absolute discretion of the trust advisor or trust protector and shall be binding on all other persons. (Added 2009, No. 20, § 1.)

• § 1102. Trust advisors and trust protectors as fiduciaries

  (a) A trust advisor or trust protector is a fiduciary with respect to each power granted to such trust advisor or trust protector. In exercising any power or refraining from exercising any power, a trust advisor or trust protector shall act in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.

  (b) A trust advisor or trust protector is an excluded fiduciary with respect to each power granted or reserved exclusively to any one or more other trustees, trust advisors, or trust protectors. (Added 2009, No. 20, § 1.)

• § 1103. Trust advisor and trust protector subject to court jurisdiction

  By accepting appointment to serve as a trust advisor or trust protector, the trust advisor or the trust protector submits personally to the jurisdiction of the courts of this State even if investment advisory agreements or other related agreements provide otherwise, and the trust advisor or trust protector may be made a party to any action or proceeding relating to a decision, action, or inaction of the trust advisor or trust protector. (Added 2009, No. 20, § 1.)

• § 1104. No duty to review actions of trustee, trust advisor, or trust protector

  (a) Whenever, pursuant to the terms of a trust, an agreement of the qualified beneficiaries authorized by the terms of the trust, or a court order, an excluded fiduciary is to follow the direction of a trustee, trust advisor, or trust protector with respect to investment decisions, distribution decisions, or other decisions of the non-excluded fiduciary, then, except to the extent that the terms of the trust, the agreement of the qualified beneficiaries, or the court order provide otherwise, the excluded fiduciary shall have no duty to:

  (1) monitor the conduct of the trustee, trust advisor, or trust protector;

  (2) provide advice to the trustee, trust advisor, or trust protector or consult with the trustee, trust advisor, or trust protector; or

  (3) communicate with or warn or apprise any beneficiary or third party concerning instances in which the excluded fiduciary would or might have exercised the excluded fiduciary’s own discretion in a manner different from the manner directed by the trustee, trust advisor, or trust protector.

  (b) Absent clear and convincing evidence to the contrary, the actions of the excluded fiduciary pertaining to matters within the scope of the trustee’s, trust advisor’s, or trust protector’s authority including confirming that the trustee’s, trust advisor’s, or trust protector’s directions have been carried out, recording and reporting actions taken at the trustee’s, trust advisor’s, or trust protector’s direction, or taking action pursuant to section 813 of this title, shall be presumed to be administrative actions taken by the excluded fiduciary solely to allow the excluded fiduciary to perform those duties assigned to the excluded fiduciary under the terms of the trust, the agreement of the qualified beneficiaries, or the court order, and such administrative actions shall not be deemed to constitute an undertaking by the excluded fiduciary to monitor the trustee, trust advisor, or trust protector or otherwise participate in actions within the scope of the trustee’s, trust advisor’s, or trust protector’s authority. (Added 2009, No. 20, § 1.)

• § 1105. Fiduciary’s liability for action or inaction of trustee, trust advisor, and trust protector

  An excluded fiduciary is not liable for:

  (1) any loss resulting from any action or inaction of a trustee, trust advisor, or trust protector; or

  (2) any loss that results from the failure of a trustee, trust advisor, or trust protector to take any action proposed by the excluded fiduciary where such action requires the authorization of the trustee, trust advisor, or trust protector, provided that an excluded fiduciary who had a duty to propose such action timely sought but failed to obtain the authorization. (Added 2009, No. 20, § 1.)