BILL AS INTRODUCED S.11
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S.11 1
Introduced by Senator Chittenden 2
Referred to Committee on 3
Date: 4
Subject: Trusts; stewardship trusts 5
Statement of purpose of bill as introduced: This bill proposes to authorize the 6
creation of stewardship trusts in Vermont. 7
An act relating to stewardship trusts 8
It is hereby enacted by the General Assembly of the State of Vermont: 9
Sec. 1. 14A V.S.A. § 409 is amended to read: 10
§ 409. NONCHARITABLE TRUST WITHOUT ASCERTAINABLE 11
BENEFICIARY 12
Except as otherwise provided in section 408 of this title or by another 13
statute, the following rules apply: 14
(1) A trust may be created for a noncharitable purpose without a definite 15
or definitely ascertainable beneficiary or for a noncharitable but otherwise 16
valid purpose to be selected by the trustee. The trust may not be enforced for 17
more than 21 500 years. 18 BILL AS INTRODUCED S.11
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(2) A trust authorized by this section may be enforced by a person 1
appointed in the terms of the trust or, if no person is so appointed, by a person 2
appointed by the Probate Division of the Superior Court. 3
(3) Property of a trust authorized by this section may be applied only to 4
its intended use, except to the extent the Probate Division of the Superior Court 5
determines that the value of the trust property exceeds the amount required for 6
the intended use. Except as otherwise provided in the terms of the trust, 7
property not required for the intended use must be distributed to the settlor, if 8
then living, otherwise to the settlor’s successors in interest. 9
Sec. 2. 14A V.S.A. § 409a is added to read: 10
§ 409a. STEWARDSHIP TRUST 11
(a) A stewardship trust may be created under this section for a business 12
purpose without a definite or definitely ascertainable beneficiary. The business 13
purpose may seek economic and noneconomic benefits. 14
(b) A stewardship trust may hold an ownership interest of any corporation, 15
partnership, limited partnership, cooperative, limited liability company, limited 16
liability partnership, or joint venture. 17
(c)(1) A stewardship trust may be enforced by one or more trust enforcers 18
appointed in the terms of the trust, and the terms of the trust may provide a 19
process for appointing successor trust enforcers. If at any time no person is 20
serving as trust enforcer, the court shall name one or more trust enforcers. 21 BILL AS INTRODUCED S.11
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(2) Each trust enforcer shall enforce the purpose and the terms of the 1
trust and shall exercise authority as a fiduciary. If more than one person is 2
serving as a trust enforcer, action may be taken by a majority of the persons 3
serving as trust enforcers. 4
(3) A trust enforcer shall not be a beneficiary of a trust created pursuant 5
to this section, but a trust enforcer may have the rights of a qualified 6
beneficiary. 7
(d)(1)(A) A stewardship trust shall have a trust stewardship committee with 8
at least three persons as members. Each member of the trust stewardship 9
committee shall exercise authority as a fiduciary. 10
(B) The terms of the trust may appoint the initial members of the 11
trust stewardship committee and may provide a process for appointing 12
successor members. 13
(2)(A) A vacancy on the trust stewardship committee shall be filled if 14
the trust stewardship committee has fewer than three members. 15
(B) A vacancy on the trust stewardship committee that is required to 16
be filled by subdivision (A) of this subdivision (2) shall be filled in the 17
following order of priority: 18
(i) by a person designated in the terms of the trust or selected 19
through a process provided in the terms of the trust; 20 BILL AS INTRODUCED S.11
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(ii) by a person appointed by unanimous agreement of the trust 1
enforcers; or 2
(iii) by a person appointed by the court. 3
(3) Unless the terms of the trust provide otherwise and except as 4
provided in subdivision (4)(D) of this subsection or subsection (f) of this 5
section, the trust stewardship committee may take action by a majority vote of 6
its members. 7
(4) Unless the terms of the trust provide otherwise, and in order to carry 8
out the purposes of the trust, the trust stewardship committee may, after notice 9
to the trust enforcers: 10
(A) remove a trustee, with or without cause; 11
(B) appoint one or more successor trustees or cotrustees; 12
(C) remove a trust enforcer, with or without cause; 13
(D) remove a member of the stewardship committee, by unanimous 14
vote of all other members of the trust stewardship committee; 15
(E) direct distributions from the trust; and 16
(F) exercise all rights belonging to the trustee, including the right to 17
vote stock owned by the trust. 18
(5) Unless the trust agreement provides otherwise, a member of the trust 19
stewardship committee or a trust enforcer may resign: 20 BILL AS INTRODUCED S.11
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(A) after at least 30 days’ notice to the trustee, all trust enforcers, and 1
all members of the trust stewardship committee; or 2
(B) at any time with approval of the court. 3
(6) The trust stewardship committee shall submit a report to the trustee 4
and to the trust enforcers at least annually showing receipts and disbursements 5
and listing trust property and liabilities. The trust stewardship committee shall 6
keep the trustee and the trust enforcers reasonably informed about the 7
administration of the trust and of the material facts necessary for the trustee to 8
comply with the trustee’s duties under section 813 of this title and for the trust 9
enforcers to protect the purposes of the trust. 10
(e)(1) A trustee of a stewardship trust shall act in accordance with a 11
direction from the trust stewardship committee unless the action is manifestly 12
contrary to the terms of the trust or the trustee knows that the action would 13
constitute a serious breach of a fiduciary duty that the trust stewardship 14
committee, the trust enforcer, or the trustee owes to the trust. 15
(2) A trustee shall be liable only for willful misconduct and shall not be 16
liable for reliance on documents provided by the trust stewardship committee 17
or the trust enforcer. 18
(f) Unless the terms of the trust provide otherwise, the trust stewardship 19
committee and the trust enforcers, acting together, may modify or terminate a 20 BILL AS INTRODUCED S.11
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stewardship trust by unanimous agreement of the members of the trust 1
stewardship committee and unanimous agreement of the trust enforcers. 2
(g) Upon termination of a stewardship trust, the trustee shall distribute all 3
remaining trust property as the terms of the trust provide, or if the terms of the 4
trust do not provide for complete distribution of the property, as the court 5
determines to be consistent with the purposes for which the trust was created. 6
(h)(1) A person serving as a trustee shall not serve as a trust enforcer or as 7
a member of the trust stewardship committee. 8
(2) A person serving as a trust enforcer shall not serve as a member of 9
the trust stewardship committee. 10
(i) This section shall not apply to a trust created pursuant to 11A V.S.A. 11
§ 7.30. 12
Sec. 3. EFFECTIVE DATE 13
This act shall take effect on passage. 14