Vt. Stat. Ann. tit. 14A, § 111
Nonjudicial settlement agreements
Redline — July 1, 2021 → current.View current text →
Current — June 1, 2022
As of July 1, 2021
(1) For purposes of this section, "interested persons" means persons whose consent would be required in order to achieve a binding settlement were the settlement to be approved by the Probate Division of the Superior Court.
(1) For purposes of this section, “interested persons” means persons whose consent would be required in order to achieve a binding settlement were the settlement to be approved by the Probate Division of the Superior Court.
(2) Except as otherwise provided in subsection (c) of this section, interested persons may enter into a binding nonjudicial settlement agreement with respect to any matter involving a trust.
(2) Except as otherwise provided in subsection (c) of this section, interested persons may enter into a binding nonjudicial settlement agreement with respect to any matter involving a trust.
(3) A nonjudicial settlement agreement is valid only to the extent it does not violate a material purpose of the trust and includes terms and conditions that could be properly approved by the Probate Division of the Superior Court under this title or other applicable law.
(3) A nonjudicial settlement agreement is valid only to the extent it does not violate a material purpose of the trust and includes terms and conditions that could be properly approved by the Probate Division of the Superior Court under this title or other applicable law.
(4) Matters that may be resolved by a nonjudicial settlement agreement include: the interpretation or construction of the terms of the trust;
(4) Matters that may be resolved by a nonjudicial settlement agreement include: the interpretation or construction of the terms of the trust;
(5) the approval of a trustee's report or accounting;
(5) the approval of a trustee’s report or accounting;
(6) direction to a trustee to perform or to refrain from performing a particular act or the grant to a trustee of any necessary or desirable power;
(6) direction to a trustee to perform or to refrain from performing a particular act or the grant to a trustee of any necessary or desirable power;
(7) the resignation or appointment of a trustee and the determination of a trustee's compensation;
(7) the resignation or appointment of a trustee and the determination of a trustee’s compensation;
(8) transfer of a trust's principal place of administration; and
(8) transfer of a trust’s principal place of administration; and
(9) liability of a trustee for an action relating to the trust.
(9) liability of a trustee for an action relating to the trust.
(10) Any interested person may request the Probate Division of the Superior Court to approve a nonjudicial settlement agreement to determine whether the representation as provided in chapter 3 of this title was adequate, and to determine whether the agreement contains terms and conditions the Probate Division of the Superior Court could have properly approved. Added 2009, No. 20, § 1; amended 2009, No. 92 (Adj. Sess.), § 5; 2009, No. 154 (Adj. Sess.), § 236, eff. Feb. 1, 2011.
(10) Any interested person may request the Probate Division of the Superior Court to approve a nonjudicial settlement agreement to determine whether the representation as provided in chapter 3 of this title was adequate, and to determine whether the agreement contains terms and conditions the Probate Division of the Superior Court could have properly approved.
OFFICIAL COMMENT
Official Comment
While the Uniform Trust Code recognizes that a court may intervene in the administration of a trust to the extent its jurisdiction is invoked by interested persons or otherwise provided by law ( see Section 201(a)), resolution of disputes by nonjudicial means is encouraged. This section facilitates the making of such agreements by giving them the same effect as if approved by the court. To achieve such certainty, however, subsection (c) requires that the nonjudicial settlement must contain terms and conditions that a court could properly approve. Under this section, a nonjudicial settlement cannot be used to produce a result not authorized by law, such as to terminate a trust in an impermissible manner.
Trusts ordinarily have beneficiaries who are minors, incapacitated, unborn or unascertained. Because such beneficiaries cannot signify their consent to an agreement, binding settlements can ordinarily be achieved only through the application of doctrines such as virtual representation or appointment of a guardian ad litem, doctrines traditionally available only in the case of judicial settlements. The effect of this section and the Uniform Trust Code more generally is to allow for such binding representation even if the agreement is not submitted for approval to a court. For the rules on representation, including appointments of representatives by the court to approve particular settlements, see Article 3.
Subsection (d) is a nonexclusive list of matters to which a nonjudicial settlement may pertain. Other matters which may be made the subject of a nonjudicial settlement are listed in the Article 3 General Comment. The fact that the trustee and beneficiaries may resolve a matter nonjudicially does not mean that beneficiary approval is required. For example, a trustee may resign pursuant to Section 705 solely by giving notice to the qualified beneficiaries and any cotrustees. But a nonjudicial settlement between the trustee and beneficiaries will frequently prove helpful in working out the terms of the resignation.
Because of the great variety of matters to which a nonjudicial settlement may be applied, this section does not attempt to precisely define the "interested persons" whose consent is required to obtain a binding settlement as provided in subsection (a). However, the consent of the trustee would ordinarily be required to obtain a binding settlement with respect to matters involving a trustee's administration, such as approval of a trustee's report or resignation.
Official source: Vermont General Assembly. Reproduced from public-domain Vermont statutes; confirm against the official source for the current text. Not legal advice.