| 1 | 1 | | BILL AS INTRODUCED S.11 |
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| 2 | 2 | | 2025 Page 1 of 6 |
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| 4 | 4 | | |
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| 5 | 5 | | VT LEG #379326 v.1 |
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| 6 | 6 | | S.11 1 |
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| 7 | 7 | | Introduced by Senator Chittenden 2 |
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| 8 | 8 | | Referred to Committee on 3 |
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| 9 | 9 | | Date: 4 |
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| 10 | 10 | | Subject: Trusts; stewardship trusts 5 |
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| 11 | 11 | | Statement of purpose of bill as introduced: This bill proposes to authorize the 6 |
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| 12 | 12 | | creation of stewardship trusts in Vermont. 7 |
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| 13 | 13 | | An act relating to stewardship trusts 8 |
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| 14 | 14 | | It is hereby enacted by the General Assembly of the State of Vermont: 9 |
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| 15 | 15 | | Sec. 1. 14A V.S.A. § 409 is amended to read: 10 |
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| 16 | 16 | | § 409. NONCHARITABLE TRUST WITHOUT ASCERTAINABLE 11 |
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| 17 | 17 | | BENEFICIARY 12 |
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| 18 | 18 | | Except as otherwise provided in section 408 of this title or by another 13 |
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| 19 | 19 | | statute, the following rules apply: 14 |
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| 20 | 20 | | (1) A trust may be created for a noncharitable purpose without a definite 15 |
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| 21 | 21 | | or definitely ascertainable beneficiary or for a noncharitable but otherwise 16 |
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| 22 | 22 | | valid purpose to be selected by the trustee. The trust may not be enforced for 17 |
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| 23 | 23 | | more than 21 500 years. 18 BILL AS INTRODUCED S.11 |
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| 24 | 24 | | 2025 Page 2 of 6 |
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| 25 | 25 | | |
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| 26 | 26 | | |
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| 27 | 27 | | VT LEG #379326 v.1 |
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| 28 | 28 | | (2) A trust authorized by this section may be enforced by a person 1 |
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| 29 | 29 | | appointed in the terms of the trust or, if no person is so appointed, by a person 2 |
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| 30 | 30 | | appointed by the Probate Division of the Superior Court. 3 |
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| 31 | 31 | | (3) Property of a trust authorized by this section may be applied only to 4 |
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| 32 | 32 | | its intended use, except to the extent the Probate Division of the Superior Court 5 |
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| 33 | 33 | | determines that the value of the trust property exceeds the amount required for 6 |
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| 34 | 34 | | the intended use. Except as otherwise provided in the terms of the trust, 7 |
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| 35 | 35 | | property not required for the intended use must be distributed to the settlor, if 8 |
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| 36 | 36 | | then living, otherwise to the settlor’s successors in interest. 9 |
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| 37 | 37 | | Sec. 2. 14A V.S.A. § 409a is added to read: 10 |
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| 38 | 38 | | § 409a. STEWARDSHIP TRUST 11 |
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| 39 | 39 | | (a) A stewardship trust may be created under this section for a business 12 |
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| 40 | 40 | | purpose without a definite or definitely ascertainable beneficiary. The business 13 |
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| 41 | 41 | | purpose may seek economic and noneconomic benefits. 14 |
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| 42 | 42 | | (b) A stewardship trust may hold an ownership interest of any corporation, 15 |
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| 43 | 43 | | partnership, limited partnership, cooperative, limited liability company, limited 16 |
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| 44 | 44 | | liability partnership, or joint venture. 17 |
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| 45 | 45 | | (c)(1) A stewardship trust may be enforced by one or more trust enforcers 18 |
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| 46 | 46 | | appointed in the terms of the trust, and the terms of the trust may provide a 19 |
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| 47 | 47 | | process for appointing successor trust enforcers. If at any time no person is 20 |
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| 48 | 48 | | serving as trust enforcer, the court shall name one or more trust enforcers. 21 BILL AS INTRODUCED S.11 |
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| 49 | 49 | | 2025 Page 3 of 6 |
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| 50 | 50 | | |
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| 51 | 51 | | |
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| 52 | 52 | | VT LEG #379326 v.1 |
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| 53 | 53 | | (2) Each trust enforcer shall enforce the purpose and the terms of the 1 |
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| 54 | 54 | | trust and shall exercise authority as a fiduciary. If more than one person is 2 |
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| 55 | 55 | | serving as a trust enforcer, action may be taken by a majority of the persons 3 |
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| 56 | 56 | | serving as trust enforcers. 4 |
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| 57 | 57 | | (3) A trust enforcer shall not be a beneficiary of a trust created pursuant 5 |
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| 58 | 58 | | to this section, but a trust enforcer may have the rights of a qualified 6 |
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| 59 | 59 | | beneficiary. 7 |
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| 60 | 60 | | (d)(1)(A) A stewardship trust shall have a trust stewardship committee with 8 |
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| 61 | 61 | | at least three persons as members. Each member of the trust stewardship 9 |
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| 62 | 62 | | committee shall exercise authority as a fiduciary. 10 |
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| 63 | 63 | | (B) The terms of the trust may appoint the initial members of the 11 |
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| 64 | 64 | | trust stewardship committee and may provide a process for appointing 12 |
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| 65 | 65 | | successor members. 13 |
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| 66 | 66 | | (2)(A) A vacancy on the trust stewardship committee shall be filled if 14 |
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| 67 | 67 | | the trust stewardship committee has fewer than three members. 15 |
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| 68 | 68 | | (B) A vacancy on the trust stewardship committee that is required to 16 |
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| 69 | 69 | | be filled by subdivision (A) of this subdivision (2) shall be filled in the 17 |
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| 70 | 70 | | following order of priority: 18 |
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| 71 | 71 | | (i) by a person designated in the terms of the trust or selected 19 |
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| 72 | 72 | | through a process provided in the terms of the trust; 20 BILL AS INTRODUCED S.11 |
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| 74 | 74 | | |
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| 76 | 76 | | VT LEG #379326 v.1 |
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| 77 | 77 | | (ii) by a person appointed by unanimous agreement of the trust 1 |
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| 78 | 78 | | enforcers; or 2 |
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| 79 | 79 | | (iii) by a person appointed by the court. 3 |
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| 80 | 80 | | (3) Unless the terms of the trust provide otherwise and except as 4 |
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| 81 | 81 | | provided in subdivision (4)(D) of this subsection or subsection (f) of this 5 |
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| 82 | 82 | | section, the trust stewardship committee may take action by a majority vote of 6 |
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| 83 | 83 | | its members. 7 |
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| 84 | 84 | | (4) Unless the terms of the trust provide otherwise, and in order to carry 8 |
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| 85 | 85 | | out the purposes of the trust, the trust stewardship committee may, after notice 9 |
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| 86 | 86 | | to the trust enforcers: 10 |
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| 87 | 87 | | (A) remove a trustee, with or without cause; 11 |
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| 88 | 88 | | (B) appoint one or more successor trustees or cotrustees; 12 |
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| 89 | 89 | | (C) remove a trust enforcer, with or without cause; 13 |
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| 90 | 90 | | (D) remove a member of the stewardship committee, by unanimous 14 |
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| 91 | 91 | | vote of all other members of the trust stewardship committee; 15 |
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| 92 | 92 | | (E) direct distributions from the trust; and 16 |
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| 93 | 93 | | (F) exercise all rights belonging to the trustee, including the right to 17 |
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| 94 | 94 | | vote stock owned by the trust. 18 |
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| 95 | 95 | | (5) Unless the trust agreement provides otherwise, a member of the trust 19 |
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| 96 | 96 | | stewardship committee or a trust enforcer may resign: 20 BILL AS INTRODUCED S.11 |
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| 99 | 99 | | |
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| 100 | 100 | | VT LEG #379326 v.1 |
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| 101 | 101 | | (A) after at least 30 days’ notice to the trustee, all trust enforcers, and 1 |
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| 102 | 102 | | all members of the trust stewardship committee; or 2 |
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| 103 | 103 | | (B) at any time with approval of the court. 3 |
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| 104 | 104 | | (6) The trust stewardship committee shall submit a report to the trustee 4 |
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| 105 | 105 | | and to the trust enforcers at least annually showing receipts and disbursements 5 |
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| 106 | 106 | | and listing trust property and liabilities. The trust stewardship committee shall 6 |
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| 107 | 107 | | keep the trustee and the trust enforcers reasonably informed about the 7 |
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| 108 | 108 | | administration of the trust and of the material facts necessary for the trustee to 8 |
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| 109 | 109 | | comply with the trustee’s duties under section 813 of this title and for the trust 9 |
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| 110 | 110 | | enforcers to protect the purposes of the trust. 10 |
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| 111 | 111 | | (e)(1) A trustee of a stewardship trust shall act in accordance with a 11 |
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| 112 | 112 | | direction from the trust stewardship committee unless the action is manifestly 12 |
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| 113 | 113 | | contrary to the terms of the trust or the trustee knows that the action would 13 |
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| 114 | 114 | | constitute a serious breach of a fiduciary duty that the trust stewardship 14 |
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| 115 | 115 | | committee, the trust enforcer, or the trustee owes to the trust. 15 |
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| 116 | 116 | | (2) A trustee shall be liable only for willful misconduct and shall not be 16 |
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| 117 | 117 | | liable for reliance on documents provided by the trust stewardship committee 17 |
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| 118 | 118 | | or the trust enforcer. 18 |
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| 119 | 119 | | (f) Unless the terms of the trust provide otherwise, the trust stewardship 19 |
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| 120 | 120 | | committee and the trust enforcers, acting together, may modify or terminate a 20 BILL AS INTRODUCED S.11 |
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| 121 | 121 | | 2025 Page 6 of 6 |
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| 122 | 122 | | |
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| 123 | 123 | | |
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| 124 | 124 | | VT LEG #379326 v.1 |
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| 125 | 125 | | stewardship trust by unanimous agreement of the members of the trust 1 |
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| 126 | 126 | | stewardship committee and unanimous agreement of the trust enforcers. 2 |
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| 127 | 127 | | (g) Upon termination of a stewardship trust, the trustee shall distribute all 3 |
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| 128 | 128 | | remaining trust property as the terms of the trust provide, or if the terms of the 4 |
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| 129 | 129 | | trust do not provide for complete distribution of the property, as the court 5 |
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| 130 | 130 | | determines to be consistent with the purposes for which the trust was created. 6 |
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| 131 | 131 | | (h)(1) A person serving as a trustee shall not serve as a trust enforcer or as 7 |
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| 132 | 132 | | a member of the trust stewardship committee. 8 |
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| 133 | 133 | | (2) A person serving as a trust enforcer shall not serve as a member of 9 |
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| 134 | 134 | | the trust stewardship committee. 10 |
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| 135 | 135 | | (i) This section shall not apply to a trust created pursuant to 11A V.S.A. 11 |
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| 136 | 136 | | § 7.30. 12 |
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| 137 | 137 | | Sec. 3. EFFECTIVE DATE 13 |
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| 138 | 138 | | This act shall take effect on passage. 14 |
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