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2023 Vermont Statutes › Title 14A - Trusts › Chapter 7 - Office of Trustee › § 703. Cotrustees

§ 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.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 7 - Office of Trustee › § 704. Vacancy in trusteeship; appointment of successor

§ 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.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 7 - Office of Trustee › § 705. Resignation of trustee

§ 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.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 7 - Office of Trustee › § 706. Removal and replacement of trustee

§ 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.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 7 - Office of Trustee › § 707. Delivery of property by former trustee

§ 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.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 7 - Office of Trustee › § 708. Compensation of trustee

§ 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.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 7 - Office of Trustee › § 709. Reimbursement of expenses

§ 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.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 801. Duty to administer trust

§ 801. Duty to administer trust
Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith in accordance with its terms and purposes and the interests of the beneficiaries and in accordance with this title. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 803. Impartiality

§ 803. Impartiality
If a trust has two or more beneficiaries, the trustee shall act impartially in administering the trust, giving due regard to the beneficiaries’ respective interests. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 804. Prudent administration

§ 804. Prudent administration
A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 805. Costs of administration

§ 805. Costs of administration
In administering a trust, the trustee may incur only costs that are reasonable in relation to the trust property, the purposes of the trust, and the skills of the trustee. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 806. Trustee’s skills

§ 806. Trustee’s skills
A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that the trustee has special skills or expertise, shall use those special skills or expertise. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 807. Delegation by trustee

§ 807. Delegation by trustee
(a) A trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in:
(1) selecting an agent;
(2) establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and
(3) periodically reviewing the agent’s actions in order to monitor the agent’s performance and compliance with the terms of the delegation.
(b) In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
(c) A trustee who complies with subsection (a) of this section is not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.
(d) By accepting a delegation of powers or duties from the trustee of a trust that is subject to the law of this State, an agent submits to the jurisdiction of the courts of this State. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 808. Powers to direct

§ 808. Powers to direct
(a) While a trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust.
(b) If the terms of a trust confer upon a person other than the settlor of a revocable trust power to direct certain actions of the trustee, the trustee shall act in accordance with an exercise of the power unless the attempted exercise is manifestly contrary to the terms of the trust or the trustee knows the attempted exercise would constitute a serious breach of a fiduciary duty that the person holding the power owes to the beneficiaries of the trust.
(c) The terms of a trust may confer upon a trustee or other person a power to direct the modification or termination of the trust.
(d) A person, other than a beneficiary, who holds a power to direct is presumptively a fiduciary who, as such, is required to act in good faith with regard to the purposes of the trust and the interests of the beneficiaries. The holder of a power to direct is liable for any loss that results from breach of a fiduciary duty. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 810. Recordkeeping and identification of trust property

§ 810. Recordkeeping and identification of trust property
(a) A trustee shall keep adequate records of the administration of the trust.
(b) A trustee shall keep trust property separate from the trustee’s own property.
(c) Except as otherwise provided in subsection (d) of this section, a trustee shall cause the trust property to be designated so that the interest of the trust, to the extent feasible, appears in records maintained by a party other than a trustee or beneficiary.
(d) If the trustee maintains records clearly indicating the respective interests, a trustee may invest as a whole the property of two or more separate trusts. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 812. Collecting trust property

§ 812. Collecting trust property
A trustee shall take reasonable steps to compel a former trustee or other person to deliver trust property to the trustee, and to redress a breach of trust known to the trustee to have been committed by a former trustee. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 814. Discretionary powers; tax savings

§ 814. Discretionary powers; tax savings
(a) Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of such terms as “absolute,” “sole,” or “uncontrolled,” the trustee shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.
(b) Subject to subsection (d) of this section, and unless the terms of the trust expressly indicate that a rule in this subsection does not apply:
(1) a person other than a settlor who is a beneficiary and trustee of a trust that confers on the trustee a power to make discretionary distributions to or for the trustee’s personal benefit may exercise the power only in accordance with an ascertainable standard; and
(2) a trustee may not exercise a power to make discretionary distributions to satisfy a legal obligation of support that the trustee personally owes another person.
(c) A power whose exercise is limited or prohibited by subsection (b) of this section may be exercised by a majority of the remaining trustees whose exercise of the power is not so limited or prohibited. If the power of all trustees is so limited or prohibited, the Probate Division of the Superior Court may appoint a special fiduciary with authority to exercise the power.
(d) Subsection (b) of this section does not apply to:
(1) a power held by the settlor’s spouse who is the trustee of a trust for which a marital deduction, as defined in § 2056(b)(5) or 2523(e) of the Internal Revenue Code of 1986, as in effect on the effective date of this title, was previously allowed;
(2) any trust during any period that the trust may be revoked or amended by its settlor; or
(3) a trust if contributions to the trust qualify for the annual exclusion under § 2503(c) of the Internal Revenue Code of 1986, as in effect on the effective date of this title. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 815. General powers of trustee

§ 815. General powers of trustee
(a) A trustee, without authorization by the Probate Division of the Superior Court, may exercise:
(1) powers conferred by the terms of the trust; and
(2) except as limited by the terms of the trust:
(A) all powers over the trust property which an unmarried competent owner has over individually owned property;
(B) any other powers appropriate to achieve the proper investment, management, and distribution of the trust property; and
(C) any other powers conferred by this title.
(b) The exercise of a power is subject to the fiduciary duties prescribed by this chapter. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 8 - Duties and Powers of Trustee › § 817. Distribution upon termination

§ 817. Distribution upon termination
(a) Upon termination or partial termination of a trust, the trustee may send to the beneficiaries a proposal for distribution. The right of any beneficiary to object to the proposed distribution terminates if the beneficiary does not notify the trustee of an objection within 30 days after the proposal was sent but only if the proposal informed the beneficiary of the right to object and of the time allowed for objection.
(b) Upon the occurrence of an event terminating or partially terminating a trust, the trustee shall proceed expeditiously to distribute the trust property to the persons entitled to it, subject to the right of the trustee to retain a reasonable reserve for the payment of debts, expenses, and taxes.
(c) A release by a beneficiary of a trustee from liability for breach of trust is invalid to the extent:
(1) it was induced by improper conduct of the trustee; or
(2) the beneficiary, at the time of the release, did not know of the beneficiary’s rights or of the material facts relating to the breach. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 9 - Uniform Prudent Investor Act and Unitrusts › § 901. Prudent investor rule

§ 901. Prudent investor rule
(a) Except as otherwise provided in subsection (b) of this section, a trustee who invests and manages trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule set forth in this chapter.
(b) The prudent investor rule, a default rule, may be expanded, restricted, eliminated, or otherwise altered by the provisions of a trust. A trustee is not liable to a beneficiary to the extent that the trustee acted in reasonable reliance on the provisions of the trust. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 9 - Uniform Prudent Investor Act and Unitrusts › § 902. Standard of care; portfolio strategy; risk and return objectives

§ 902. Standard of care; portfolio strategy; risk and return objectives
(a) A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
(b) A trustee’s investment and management decisions respecting individual assets must be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
(c) Among circumstances that a trustee shall consider in investing and managing trust assets are such of the following as are relevant to the trust or its beneficiaries:
(1) general economic conditions;
(2) the possible effect of inflation or deflation;
(3) the expected tax consequences of investment decisions or strategies;
(4) the role that each investment or course of action plays within the overall trust portfolio, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property;
(5) the expected total return from income and the appreciation of capital;
(6) other resources of the beneficiaries;
(7) needs for liquidity, regularity of income, and preservation or appreciation of capital; and
(8) an asset’s special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.
(d) A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets.
(e) A trustee may invest in any kind of property or type of investment consistent with the standards of this chapter. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 9 - Uniform Prudent Investor Act and Unitrusts › § 903. Diversification

§ 903. Diversification
A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 9 - Uniform Prudent Investor Act and Unitrusts › § 904. Duties at inception of trusteeship

§ 904. Duties at inception of trusteeship
Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets in order to bring the trust portfolio into compliance with the purposes, terms, distribution requirements, and other circumstances of the trust and with the requirements of this chapter. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 9 - Uniform Prudent Investor Act and Unitrusts › § 905. Reviewing compliance

§ 905. Reviewing compliance
Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee’s decision or action and not by hindsight. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 9 - Uniform Prudent Investor Act and Unitrusts › § 906. Language invoking standard of this chapter

§ 906. Language invoking standard of this chapter
The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted under this chapter: “investments permissible by law for investment of trust funds,” “legal investments,” “authorized investments,” “using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital,” “prudent man rule,” “prudent trustee rule,” “prudent person rule,” and “prudent investor rule.” (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 9 - Uniform Prudent Investor Act and Unitrusts › § 908. Express total return unitrusts

§ 908. Express total return unitrusts
(a) The following provisions shall apply to a trust that, by its governing instrument, requires or permits the distribution, at least annually, of a unitrust amount equal to a fixed percentage of not less than three nor more than five percent per year of the fair market value of the trust’s assets, valued at least annually, such trust to be referred to in this section as an “express total return unitrust.”
(b) The unitrust amount for an express total return unitrust may be determined by reference to the fair market value of the trust’s assets in one year or more than one year.
(c) Distribution of such a fixed percentage unitrust amount is considered a distribution of all of the income of the express total return unitrust.
(d) An express total return unitrust may provide a mechanism for changing the unitrust percentage similar to the mechanism provided under section 907 of this title, based upon the factors noted therein, and may provide for a conversion from a unitrust to an income trust or a reconversion of an income trust to a unitrust similar to the mechanism under section 907 of this title.
(e) If an express total return unitrust does not specifically or by reference to section 907 of this title deny a power to change the unitrust percentage or to convert to an income trust, then the trustee shall have such power.
(f) The distribution of a fixed percentage of not less than three percent nor more than five percent reasonably apportions the total return of an express total return unitrust.
(g) The trust instrument may grant discretion to the trustee to adopt a consistent practice of treating capital gains as part of the unitrust distribution, to the extent that the unitrust distribution exceeds the net accounting income, or it may specify the ordering of such classes of income.
(h) Unless the terms of the trust specifically provide otherwise, a distribution of the unitrust amount from an express total return unitrust shall be considered to have been made from the following sources in order of priority:
(1) from net accounting income determined as if the trust were not a unitrust;
(2) from ordinary income not allocable to net accounting income;
(3) after calculating the trust’s capital gain net income as described in the Internal Revenue Code of 1986 (as in effect on the effective date of this title and referred to in this section as the “I.R.C.”), § 1222(9), from net realized short-term capital gain as described in I.R.C. § 1222(5) and then from net realized long-term capital gain described in I.R.C. § 1222(7); and
(4) from the principal of the trust.
(i) The trust instrument may provide that:
(1) assets for which a fair market value cannot be readily ascertained shall be valued using such valuation methods as are deemed reasonable and appropriate; and
(2) assets used by a trust beneficiary, such as a residence property or tangible personal property, may be excluded from the net fair market value for computing the unitrust amount. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1001. Remedies for breach of trust

§ 1001. Remedies for breach of trust
(a) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.
(b) To remedy a breach of trust that has occurred or may occur, the Probate Division of the Superior Court may:
(1) compel the trustee to perform the trustee’s duties;
(2) enjoin the trustee from committing a breach of trust;
(3) compel the trustee to redress a breach of trust by paying money, restoring property, or other means;
(4) order a trustee to account;
(5) appoint a special fiduciary to take possession of the trust property and administer the trust;
(6) suspend the trustee;
(7) remove the trustee as provided in section 706 of this title;
(8) reduce or deny compensation to the trustee;
(9) subject to section 1012 of this title, void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and recover the property or its proceeds; or
(10) order any other appropriate relief. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1002. Damages for breach of trust

§ 1002. Damages for breach of trust
(a) A trustee who commits a breach of trust is liable to the beneficiaries affected for the greater of:
(1) the amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred; or
(2) the profit the trustee made by reason of the breach.
(b) Except as otherwise provided in this subsection, if more than one trustee is liable to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the other trustee or trustees. A trustee is not entitled to contribution if the trustee was substantially more at fault than another trustee or if the trustee committed the breach of trust in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries. A trustee who received a benefit from the breach of trust is not entitled to contribution from another trustee to the extent of the benefit received. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1003. Damages in absence of breach

§ 1003. Damages in absence of breach
(a) A trustee is accountable to an affected beneficiary for any profit made by the trustee arising from the administration of the trust, even absent a breach of trust. Nothing in this section limits a trustee’s right to reasonable compensation under section 708 of this title.
(b) Absent a breach of trust, a trustee is not liable to a beneficiary for a loss or depreciation in the value of trust property or for not having made a profit. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1004. Attorney’s fees and costs

§ 1004. Attorney’s fees and costs
In a judicial proceeding involving the administration of a trust, the Probate Division of the Superior Court, as justice and equity may require, may award costs and expenses, including reasonable attorney’s fees, to any party, to be paid by another party or from the trust that is the subject of the controversy. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1005. Limitation of action against trustee

§ 1005. Limitation of action against trustee
(a) A beneficiary may not commence a proceeding against a trustee for breach of trust more than one year after the date the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust.
(b) A report adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the beneficiary or representative knows or has reason to know of the potential claim or that the beneficiary had a duty to inquire further and the response to such an inquiry would have disclosed the potential claim. If written notice is given to the trustee by a beneficiary or representative within the time for commencing an action under subsection (a) of this section stating that the beneficiary or representative has received insufficient information from the trustee’s report to determine whether to commence an action for breach of trust, the time for commencing an action shall be extended by six months. If no proceeding is commenced within the extended time, it shall be conclusively presumed that the report adequately disclosed the existence of any potential claim.
(c) If subsection (a) of this section does not apply, a judicial proceeding by a beneficiary against a trustee for breach of trust must be commenced within three years after the first to occur of:
(1) the removal, resignation, or death of the trustee;
(2) the termination of the beneficiary’s interest in the trust; or
(3) the termination of the trust.
(d) Subsections (a) through (c) of this section shall not apply to the filing of a petition in Probate Division of the Superior Court by the Attorney General for breach of trust against the trustee of a charitable trust with a principal place of administration in this State. The Attorney General may file a petition within three years after the potential claim arises. (Added 2009, No. 20, § 1; amended 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1006. Reliance on trust instrument

§ 1006. Reliance on trust instrument
A trustee who acts in reasonable reliance on the terms of the trust as expressed in the trust instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted from the reliance. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1007. Event affecting administration or distribution

§ 1007. Event affecting administration or distribution
If the happening of an event, including marriage, divorce, performance of educational requirements, attainment of a specified age, or death, affects the administration or distribution of a trust, a trustee who has exercised reasonable care to ascertain the happening of the event is not liable for a loss resulting from the trustee’s lack of knowledge. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1008. Exculpation of trustee

§ 1008. Exculpation of trustee
(a) A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it:
(1) relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries; or
(2) was inserted as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.
(b) An exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that its existence and contents were adequately communicated to the settlor. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1009. Beneficiary’s consent, release, or ratification

§ 1009. Beneficiary’s consent, release, or ratification
A trustee is not liable to a beneficiary for breach of trust if the beneficiary consented to the conduct constituting the breach, released the trustee from liability for the breach, or ratified the transaction constituting the breach, unless:
(1) the consent, release, or ratification of the beneficiary was induced by improper conduct of the trustee; or
(2) at the time of the consent, release, or ratification, the beneficiary did not know of the beneficiary’s rights or of the material facts relating to the breach. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1010. Limitation on personal liability of trustee

§ 1010. Limitation on personal liability of trustee
(a) Except as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee’s fiduciary capacity in the course of administering the trust if the trustee in making the contract disclosed the fiduciary capacity. The addition of the phrase “trustee” or “as trustee” or a similar designation to the signature of a trustee on a written contract is considered prima facie evidence of a disclosure of fiduciary capacity.
(b) A trustee is personally liable for torts committed in the course of administering a trust, or for obligations arising from ownership or control of trust property, including liability for violation of environmental law, only if the trustee is personally at fault.
(c) A claim based on a contract entered into by a trustee in the trustee’s fiduciary capacity, on an obligation arising from ownership or control of trust property, or on a tort committed in the course of administering a trust, may be asserted in a judicial proceeding against the trustee in the trustee’s fiduciary capacity, whether or not the trustee is personally liable for the claim. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1011. Interest as general partner

§ 1011. Interest as general partner
(a) Except as otherwise provided in subsection (c) of this section or unless personal liability is imposed in the contract, a trustee who holds, in a fiduciary capacity, an interest as a general partner in a general or limited partnership is not personally liable on a contract entered into by the partnership after the trust’s acquisition of the interest if the fiduciary capacity was disclosed in the contract. The requirement of disclosure in the contract will be satisfied if the trustee signs the contract or signs another writing which is contemporaneously delivered to the other parties to the contract in a manner that clearly evidences that the trustee executed the contract in a fiduciary capacity.
(b) Except as otherwise provided in subsection (c) of this section, a trustee who holds an interest as a general partner is not personally liable for torts committed by the partnership or for obligations arising from ownership or control of the interest unless the trustee is personally at fault.
(c) The immunity provided by this section does not apply if an interest in the partnership is held by the trustee in a capacity other than that of trustee or is held by the trustee’s spouse or one or more of the trustee’s descendants, siblings, or parents, or the spouse of any of them.
(d) If the trustee of a revocable trust holds an interest as a general partner, the settlor is personally liable for contracts and other obligations of the partnership as if the settlor were a general partner. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 10 - Liability of Trustees and Rights of Persons Dealing With Trustee › § 1012. Protection of person dealing with trustee

§ 1012. Protection of person dealing with trustee
(a) A person other than a beneficiary who in good faith assists a trustee or who in good faith and for value deals with a trustee without knowledge that the trustee is exceeding or improperly exercising the trustee’s powers is protected from liability as if the trustee properly exercised the power.
(b) A person other than a beneficiary who in good faith deals with a trustee is not required to inquire into the extent of the trustee’s powers or the propriety of their exercise.
(c) A person who in good faith delivers assets to a trustee need not ensure their proper application.
(d) A person other than a beneficiary who in good faith assists a former trustee or who in good faith and for value deals with a former trustee without knowledge that the trusteeship has terminated is protected from liability as if the former trustee were still a trustee.
(e) Comparable protective provisions of other laws relating to commercial transactions or transfer of securities by fiduciaries prevail over the protection provided by this section. (Added 2009, No. 20, § 1.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 11 - Trusts Protectors and Trust Advisors › § 1101. Trust advisors and trust protectors

§ 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.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 11 - Trusts Protectors and Trust Advisors › § 1102. Trust advisors and trust protectors as fiduciaries

§ 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.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 11 - Trusts Protectors and Trust Advisors › § 1103. Trust advisor and trust protector subject to court jurisdiction

§ 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.)
2023 Vermont Statutes › Title 14A - Trusts › Chapter 11 - Trusts Protectors and Trust Advisors › § 1104. No duty to review actions of trustee, trust advisor, or trust protector

§ 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.)