Requirements (5)
- Competent: The grantor must have the capacity to create a trust.
- Intent: The grantor must indicate an intention to create a trust.
- Definite Beneficiary: The trust must have a definite beneficiary, unless it is a charitable trust or a trust for the care of an animal.
- Trustee’s Duties: The trustee must have duties to perform.
- Sole Trustee Cannot be the Sole Beneficiary: The same person cannot be both the sole trustee and the sole beneficiary of all beneficiary interests.[1]
Laws
Amending/Revoking – Unless the terms of the trust expressly provide that it is irrevocable, the grantor may amend or revoke the trust.[2]
Bond Requirement – The trustee must only put forward a bond if this is a requirement under the terms of the trust or the Probate Division of the Superior Court finds that a bond is necessary to protect the interests of the beneficiaries.[3]
Certification of Trust – Instead of a copy of the trust instrument, the trustee may furnish to a person other than a beneficiary a certification of trust that sets forth the provisions of the trust and includes particular information about the grantor and the trustee.[4]
Co-Trustees – Co-trustees who cannot reach a unanimous decision may act by majority decision.[5]
Contesting a Trust – A person may commence a proceeding to contest a trust within the earlier of three years after the grantor’s death or four months after receiving a copy of the trust instrument from the trustee.[6]
Costs Related to the Trust – In administering the trust, the trustee may only incur costs that are considered reasonable.[7]
Jurisdiction – A trust created in another jurisdiction is valid in Vermont if it was created in compliance with the laws of that jurisdiction.[8]
Oral Trusts – The creation of an oral trust and its terms may only be established by clear and convincing evidence.[9]
Pet Trusts – A trust may be validly created to provide for the care of one or more animals that are alive during the grantor’s lifetime.[10]
Signing Requirements – Vermont law does not require that a trust be signed.
Spendthrift Provision – A spendthrift provision is only considered valid if it restrains both the voluntary and involuntary transfer of a beneficiary’s interest.[11]
Trustee’s Compensation – If the trustee’s compensation is not specified by the terms of the trust, the trustee is otherwise entitled to reasonable compensation.[12]
Trustee’s Duties – Upon accepting a trusteeship, the trustee has a duty to prudently administer the trust in good faith, in accordance with its purpose and terms, and in the interests of the beneficiaries.[13]
Trustee’s Powers – In addition to those powers outlined in the trust instrument, the trustee has the power to collect, acquire, sell, exchange, partition, or otherwise alter the character of trust property in order to pursue the purposes of the trust.[14]