§ 14212. Joint fiduciary accounts
(a) Statement of purpose. The purpose of this section is to create a new form of joint
financial account for which the account owner designates a fiduciary with authority
to use monies in the account for the benefit and under the direction of the account
owner and to enable the account owner as well as law enforcement to enforce the terms
of the declaration of intent.
(b) A “joint fiduciary account” is created by a deposit in a financial institution in
the name of an owner naming a fiduciary or several fiduciaries when the owner has
received a disclosure statement and executed a declaration of intent as provided in
this section. An “owner” may be one or more joint owners of the account. Only the
owner may designate a fiduciary at the time an account is opened, or may substitute
or remove a fiduciary. A fiduciary shall act only in accordance with the declaration
of intent and shall have authority to take all actions permitted by the terms and
conditions of the account that are consistent with the declaration of intent.
(c) The declaration of intent shall include date of execution; name and signature of owner;
name and signature of fiduciary; any limitations on the power of the fiduciary to
distribute or expend the funds; whether the fiduciary is to be paid and, if so, how
much and on what basis; name and signature of two or more witnesses, neither of whom
shall, at the time of execution, be the fiduciary and who attest to the sound mind
and lack of duress on the owner; acknowledgment of receipt by the fiduciary of a copy
of the declaration; and notice to the fiduciary that a withdrawal or expenditure of
the funds in the joint fiduciary account that is not in accordance with the declaration
of intent may result in criminal or civil liability. The financial institution that
is to hold the joint fiduciary account shall provide its name and address and the
number of the account.
(d) A disclosure statement must accompany a declaration of intent. The disclosure statement
and declaration of intent shall be in not less than 10- point type and in substantially
the following form:
(1) Disclosure Statement:
INFORMATION CONCERNING JOINT FIDUCIARY ACCOUNTS
A joint fiduciary account allows you to give direction on how you would like your
money to be spent, at the same time as it allows you to give another person (or persons)
authority to withdraw money or write checks on your account. If you open a joint fiduciary
account, you are considered the “owner” of the account. The person or persons you
authorize to access the account are called a “fiduciary.” The fiduciary shall handle
your money in a way that is beneficial to you and to act according to your instructions.
You, as the owner, always have the right to withdraw money from or to write checks
on the account.
One way to understand the advantages of a joint fiduciary account is to compare it
to alternative forms of accounts. A regular joint account is an account in two or
more names. Both people have the same authority to take and use the money. Thus, even
if the money really belongs to one of the account holders, and the intent was that
it would be used for that person, nothing can be done to stop the other account holder
from taking and using all the money for other purposes.
A sole account with multiple authorized signatures provides a little more protection
than a regular joint account. At least it is clear with this account that the money
really belongs to the person whose name is on the account, and does not belong to
those who are only authorized to sign. (There are often tax reasons for a person to
have a sole account with multiple authorized signatures rather than a joint account.)
Nevertheless, nothing can be done to stop a person who is authorized to sign on the
account from taking and using all the money for some purpose other than for the person
whose money it is.
A joint fiduciary account provides more protection for the owner than either of the
other accounts because the owner makes a clear statement about how the money can be
used, and the fiduciary has to follow those instructions or be subject to civil or
criminal liability, or both. The fiduciary is also legally required to keep track
of how the money is spent so the owner or another authorized person can verify that
the money was used according to the instructions.
How do you want your money to be spent?
If you open a joint fiduciary account, you decide how you want your money to be spent.
This statement should be broad enough to include everything you need and want, but
not so broad as to go too far beyond that. Thus, you might want to instruct the fiduciary
to spend your money on “all my basic living expenses and, if any money is left over,
on gifts to my children and grandchildren, but not to exceed five percent of deposits
per year.” What is included in the instructions to the fiduciary is completely up
to you. If you want to pay your fiduciary for the services provided, or if you want
your fiduciary to be able to make gifts to himself or herself or others, you must
explicitly indicate that in your declaration of intent.
Do you want special instructions on accountings?
If you give no special instructions on accountings, the fiduciary must just keep track
of how the money is spent and provide that information to you, your legal representative,
a state agency or a court, but only if asked to do so. You might want to instruct
your fiduciary to give a periodic accounting to you or to someone else. Thus, your
instructions could include: “Give a copy of an accounting of your use of this account
to me and to my attorney [or my daughter] every January.”
If you want more than one fiduciary, what do you want their relationship to be?
For some account owners, it is useful to name more than one fiduciary. For example,
you might want your daughter to be the primary fiduciary, but your nephew to be the
fiduciary when she goes to Florida every winter. You can name more than one fiduciary,
but it is useful for you to give them instructions on when you want each to act. Those
instructions dictate how they should act. However, the financial institution holding
the account is under no obligation to make sure the fiduciaries act in accordance
with your instructions; it will still accept either signature as valid for taking
money out of the account.
Are you trying to make sure your fiduciary takes certain actions, or just trying to
give your fiduciary authority to act?
Sometimes an account owner wants to use the account to make sure the fiduciary takes
certain actions, such as paying the utility bills or paying the mortgage. The joint
fiduciary account cannot guarantee for you that the fiduciary will act as you hope.
The account simply authorizes the fiduciary to act, but does not oblige the fiduciary
to act. The same is true for a regular joint account, as well as a sole account with
multiple authorized signatures. For any of these accounts, if you want to make sure
certain bills are paid, you and your creditor may agree to have the creditor automatically
debit your account on a specific day of the month for the amount of your bill.
Have you already given or do you want to give someone authority to make decisions
for you beyond using the money in an account?
Creating a joint fiduciary account will only give the fiduciary authority to act on
your behalf with regard to the monies held in the account. It can be combined with
a power of attorney or a durable power of attorney (one that lasts even if you are
no longer able to make decisions for yourself). You can name the same person to be
your fiduciary on a joint fiduciary account and your agent under a power of attorney,
or you can name different people for each. In either event, it is useful to think
through who should be named in each document and the relationship between them if
you are going to name different people. If you have an attorney preparing a power
of attorney, consider consulting with the attorney when opening a joint fiduciary
account.
THE JOINT FIDUCIARY ACCOUNT WILL NOT BE VALID UNLESS A DECLARATION OF INTENT IS SIGNED
BY YOU IN THE PRESENCE OF TWO OR MORE WITNESSES WHO ARE NOT A NAMED FIDUCIARY, AND
IS ALSO SIGNED BY THE FIDUCIARY.
(2) Declaration of Intent:
DECLARATION OF INTENT FOR JOINT FIDUCIARY ACCOUNT
OWNER OF ACCOUNT
I/We ____________ , hereby open a Joint Fiduciary Account.
Following are my instructions to the fiduciary for how monies that are deposited
into this joint fiduciary account shall be used:
_________________________________________
_________________________________________
(Attach additional pages as necessary)
I/We hereby appoint __________ of __________ (town of residence) and ______ of ______ (town of residence) to be the fiduciary(ies) on the account, and acknowledge that
I/we have received a copy of “Information Concerning Joint Fiduciary Accounts”.
Dated at _______ , this ___ day of ____ , 20__ .
__________ Signature of Owner of Account
Dated at _______ , this ___ day of ____ , 20__ .
__________ Signature of Owner of Account
WITNESSES
I declare that the owner(s) appear(s) to be of sound mind and free from duress at
the time of signing this Declaration of Intent for a joint fiduciary account, and
that the owner(s) affirmed that he and/or she is (are) aware of the nature of the
document and is (are) signing it freely and voluntarily. I further declare that I
am not a person named as a fiduciary.
__________________
Witness Signature ________ Dated: ______
Witness Address ________
Witness (Print Name) _______
__________________
Witness Signature ________ Dated: ______
Witness Address ________
Witness (Print Name) _______
FIDUCIARIES (Only one is required.)
I declare that I am willing to act as the fiduciary on the Joint Fiduciary Account
of __________ (owner(s)). I have read the Declaration of Intent and agree to use the money in the
account only for the purposes stated in the Declaration. I further agree to maintain
accurate records of my use of any monies in the account and to produce them upon request
by the owner, by a legal representative of the owner, by a state agency, or by a court.
I understand that my authority to act ceases when an owner changes the fiduciary,
closes the account, or the last owner has died. I further acknowledge that I may be
sued civilly if I intentionally or negligently fail to abide by the terms of the Declaration
of Intent, or may be charged criminally if I intentionally fail to abide by its terms,
or both. I acknowledge that I have received a copy of the Declaration of Intent.
____________
Fiduciary (Print Name)
_________________________________________
Fiduciary Address
__________________ Date _________________________________________
Fiduciary Signature
If more than one:
____________
Fiduciary (Print Name)
_________________________________________
Fiduciary Address
__________________ Date _________________________________________
Fiduciary Signature
For Financial Institution Use Only:
Financial Institution Name: ____ Account Number: _________________________________________
Address: _________________________________________
(3) The Commissioner shall have the authority to adopt rules amending the disclosure statement
and declaration of intent to reflect changes necessitated by a change in law or to
make minor changes to the forms in this subsection.
(e) The fiduciary shall maintain accurate records to permit an accounting of the acts
of the fiduciary, and shall provide such records and accounting if requested to do
so by the owner, by a legal representative of the owner, by the Attorney General,
a State’s Attorney, or the Department of Disabilities, Aging, and Independent Living
if any has reason to believe the fiduciary is in violation of this section, or by
a court of competent jurisdiction.
(f) All rights, title, interest, and claim to a joint fiduciary account, and any additions
or accumulations to the account, shall be the property of the owner of the account.
An owner shall have authority to take all actions permitted by the terms and conditions
of the account. The designation of a fiduciary shall not affect the title to funds
in the account, and the owner shall not be considered to have made a gift to the fiduciary
of all or any portion of the funds in the joint fiduciary account, or to any additions
or accumulations to the account. The fiduciary shall have no right of survivorship
in the account unless such right is specifically provided for in the account title.
(g) The financial institution holding a joint fiduciary account shall retain a signed
copy of the declaration of intent according to the financial institution’s records
retention policy. Notwithstanding any provision of law to the contrary, no financial
institution shall be responsible for monitoring transactions to or from any joint
fiduciary account. A financial institution shall not be liable for withdrawals and
payments made by the fiduciary unless an owner has notified the financial institution,
in accordance with the terms and conditions of the account, to change the fiduciary,
or has closed the account, or the financial institution has been notified that the
last owner is deceased.
(h) Any owner who sustains damages or injury as a result of a fiduciary’s action or inaction
in violation of this section or the declaration of intent may sue the fiduciary for
appropriate equitable relief, and may sue and recover from the fiduciary the amount
of his or her damages, reasonable attorney’s fees, and exemplary damages not exceeding
three times the owner’s damages. Nothing in this section shall be construed to abrogate
any other causes of action or relief at law or equity to which the owner is entitled
under other laws or at common law.
(i) Whenever the Attorney General or a State’s Attorney has reason to believe that a fiduciary
has used or is about to use the proceeds in a joint fiduciary account in violation
of the declaration of intent, the Attorney General or a State’s Attorney may bring
an action in the name of the State against such person to restrain by temporary or
permanent injunction the use of funds from the account. The action may be brought
in the Superior Court of the county in which the joint fiduciary account is located,
where the owner resides, or where the fiduciary resides, has a place of business,
or is doing business. In addition to the foregoing, the Attorney General or a State’s
Attorney may request, and the Court is authorized to render, any other temporary or
permanent relief, or both, as may be in the public interest, including closing the
account, replacing the fiduciary, ordering restitution of cash to the account, imposing
of a civil penalty of not more than $10,000.00 for each violation, and ordering reimbursement
to the State of Vermont for the reasonable value of its services and expenses in investigating
and prosecuting the action. In addition to the foregoing, the Attorney General or
a State’s Attorney may seek relief under 33 V.S.A. chapter 69, subchapter 2 or may
charge the fiduciary pursuant to 13 V.SA. § 2028. (Added 2001, No. 115 (Adj. Sess.), § 1; amended 2005, No. 174 (Adj. Sess.), § 13; 2021, No. 105 (Adj. Sess.), § 296, eff. July 1, 2022.)