Bill Text: VA SB566 | 2024 | Regular Session | Prefiled
Bill Title: Trusts; release or ratification of trustee by beneficiary, response of beneficiary in writing.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2024-04-05 - Governor: Acts of Assembly Chapter text (CHAP0600) [SB566 Detail]
Download: Virginia-2024-SB566-Prefiled.html
Be it enacted by the General Assembly of Virginia:
1. That §64.2-800 of the Code of Virginia is amended and reenacted as follows:
§64.2-800. Beneficiary's consent, release, or ratification.
A. 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.
B. A trustee may obtain a settlement of accounts pursuant to this subsection if (i) a trust terminates pursuant to the terms of the trust; (ii) a trust terminates early pursuant to §64.2-729; (iii) a trustee resigns or is removed; or (iv) a trustee seeks discharge of an interim account period when the trust is continuing.
1. A trustee who proceeds in accordance with this subsection shall provide the following to all beneficiaries of the trust and the successor trustee, if applicable, within a reasonable time after termination of the trust pursuant to the terms of the trust, the resignation or removal of the trustee, or the end of the period for which the trustee is seeking discharge:
a. A statement of the fair market value of the net assets to be distributed from a terminating trust or to a successor trustee;
b. An accounting for the prior two years of all receipts, disbursements, and inventory value of the net assets;
c. An estimate for any items reasonably anticipated to be received or disbursed;
d. The amount of any fees, including trustee fees, remaining to be paid;
e. Notice that the trust is terminating or that the trustee has resigned or been removed, the time period for which the trustee seeks discharge of its accounts, and a statement that any claims against a trustee pursuant to §§64.2-753 and 64.2-796, if applicable, shall be barred if no objection is received within the time period pursuant to subsection C;
f. The name and mailing address of the trustee; and
g. The name and telephone number of an individual who may be contacted for additional information.
2. The trustee may also provide the statement and notice pursuant to this subsection to any other person who the trustee reasonably believes may have an interest in the trust.
3. The statement and notice required by this subsection shall be provided in accordance with § 64.2-707.
C. If, after receipt of the notice and statements required by subsection B, a beneficiary or other party who received such notice and statements objects to a disclosed act or omission, such beneficiary or other party shall provide in writing notice of such objection to the trustee within 45 days after the notice was sent by the trustee. If no written objection is provided within the 45-day period, the statements pursuant to subsection B shall be considered to have been approved by the recipient. Additionally, a trustee may rely on a written statement of a beneficiary or any other party who received such notice and statements that such beneficiary or other party does not object. If a trust is terminating pursuant to the terms of the trust or the trustee's resignation or removal, within a reasonable period of time following the expiration of the 45-day objection period, the trustee shall distribute the assets pursuant to the terms of the trust or to the successor trustee.
D. If a beneficiary provides the trustee with an objection in writing in compliance with the provisions of subsection C, the trustee or beneficiary shall do one of the following:
1. Submit such objection in writing to the court for resolution and pay any expenses related to commencing a proceeding from the funds of the trust; or
2. Resolve the objection by a nonjudicial settlement agreement or other written agreement. Such agreement may include a release, an indemnity clause, or both, on behalf of the beneficiary against the trustee relating to the trust. If the parties agree to such agreement, any related expenses shall be paid from the funds of the trust. Upon a resolution of an objection in accordance with this subdivision, the trustee shall, within a reasonable period of time, distribute the remaining trust assets pursuant to the terms of the trust or to the successor trustee.
E. When a trustee complies with the provisions of subsections B, C, and D, has received no objection, and distributes the assets of a terminating trust to a beneficiary or to a successor trustee, such action shall have the same legal and preclusive effect as if a court had entered a final order approving the trustee's final account or approving the trustee's interim accounts. A beneficiary or other party who received the notice and statements and either consented or did not object shall be prohibited from bringing a claim against the trustee for challenging the validity of (i) the trust or (ii) the period of such interim accounts.
F. The provisions of §64.2-714 through §64.2-717 shall apply to this section.
G. Nothing in this section shall preclude a trustee from proceeding pursuant to §64.2-710 to have the trustee's accounts reviewed and settled by the court.
