Virginia Uniform Trust Code

Virginia Uniform Trust Code The Virginia Uniform Trust Code ["VUTC"], § 64.2-700 thru 64.2-808 of the Code of Virginia guides all trust drafting and interpretation and is supplemented by Virginia common law and principles of equity.   Knowledge of the VUTC is the starting point to all modern drafting of revocable trusts. Most states are moving towards uniform laws. However each state’s uniform laws and common law are state specific. Unlike federal laws, state prerogative prevents one from assuming that D.C. Uniform Trust Code is the same as the Virginia Uniform Trust code. In fact Virginia and the District of Columbia’s uniform laws are different. Two Sided Coin The first side of the coin is the VA UTC permits the drafter latitude to expressly draft consistent with the client’s planning goals, except in certain areas e.g., modifying the power of the court. The general rule is the terms of the trust govern the administration of the trust, unless as otherwise provided in the VUTC. .  Flip the  coin, and the unwary drafter or beneficiary reading a trust, may be bound by different terms irrespective of the terms of the trust if the terms run afoul of VUTC. Some aspects are mandatory, and the drafter cannot change: Requirements for creating a trust, or the duty of the trustee to act in good faith or the duty of the trust to act in accordance with the purpose of the trust; the efficacy of spendthrift trusts nor that a trust shall have a purpose that is lawful, not contrary to public policy and possible to achieve. Picture is Dean Smithmore Myers, 1975 Dean of the Gonzaga University Law School and a mentor in my life that law is to be practiced both competently but also with civility.

Trust terms cannot tamper with a Court’s powers to: Benefit  beneficiaries Modify a trust Adjust unreasonable trustee compensation Affect bond Adjudicate trusts cases timely brought before a court of competent jurisdiction Take any action it deems in the interest of justice. Thus, the Virginia Uniform Trust Code governs the duties and powers of trustees, relationships among trustees, and the rights of the beneficiaries. Definitions For purposes of this primer, these terms are defined as followed: Ascertainable standards pertain the health, education, support and maintenance of an individual [may be referred to also as the “HEMS” standard]. Beneficiary means a person that has a present or future beneficial interest in a trust. The interest may be vested or contingent. Beneficiary also means a person [other than a trustee] that holds a power of appointment over trust property.  Interested persons are persons are trustee and beneficiary.  Qualified Beneficiary means living or then existing beneficiary who, on the date the beneficiary's qualification is determined:  (i) is a distributee or permissible distributee of trust income or principal;  (ii) would be a distributee or permissible distributee of trust income or principal if the interests of the distributees described is terminated on that date, but the termination of those interests would not cause the trust to terminate; or  (iii) would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date. Power of withdrawal means a presently exercisable general power of appointment other than a power exercisable by a trustee which is limited by an ascertainable standard, or which is exercisable by another person only upon consent of the trustee or a person holding an adverse interest.