Alexandria, VA Estate Planning Bloghttps://oldtownattorney.com/lawyer/blog/Alexandria,-VA-Estate-Planning-Blogen-usThu, 09 Apr 2026 07:08:30 GMT10https://oldtownattorney.com/lawyer/2014/07/02/Trusts/Trustee-Duties-Trustee-Duty-to-Invest_bl14197.htm
In administering, managing and investing trust assets, the trustee may have to comply with the provisions of the Uniform Prudent Investor Act and the Uniform Principal and Income Act.

If you have questions about the Prudent Investor Rule or the Principal and income Act, or believe that your Trustee has violated the prudent investor rule, please contact us.]]>Wed, 02 Jul 2014 00:00:00 GMTBlogshttps://oldtownattorney.com/lawyer/2014/07/02/Trusts/Court-Removal-of-Trustee_bl14198.htmRemoval of a Trustee: Charitable Trust
The settlor, a cotrustee, or a beneficiary, or, in the case of a charitable trust, the Attorney General may petition the court to remove a trustee, or a trustee may be removed by the court on its own initiative.

Removal of a Trustee: Generally
The court may remove a trustee if:

1. The trustee has committed a serious breach of trust;
2. Lack of cooperation among cotrustees substantially impairs the administration of the trust;
3. Because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries; or
4. There has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available]]>Wed, 02 Jul 2014 00:00:00 GMTBlogshttps://oldtownattorney.com/lawyer/2014/07/02/Trusts/Trustee-Liability-for-Breach-of-Trust-_bl14199.htmPersonal Trustee Liability: Trust Reliance
A Trustee who acts in reasonable reliance on the terms of the Trust as expressed in the Trust instrument is not liable to a beneficiary for a breach of Trust to the extent the breach resulted from the reliance.

However, a term of a Trust relieving a trustee of liability for breach of Trust is unenforceable to the extent that it:

1. Relieves the Trustee of liability for breach of Trust committed in bad faith or with reckless indifference to the purposes of the Trust or the interests of the beneficiaries; or
2. Was inserted as the result of an abuse by the Trustee of a fiduciary or confidential relationship to the settlor.

Note: An exculpatory term drafted or caused to be drafted by the Trustee is invalid as an abuse of a fiduciary or confidential relationship unless the Trustee proves that the existence and contents of the exculpatory term were adequately communicated to the settlor.

Personal Trustee Liability: Beneficiary Consent or Ratification
Also, 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:

The consent, release, or ratification of the beneficiary was induced by improper conduct of the trustee; or
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.

Personal Trustee Liability: Contract
Except as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee's fiduciary capacity in the course of administering the trust if the trustee in the contract disclosed the fiduciary capacity.

A trustee is personally liable for torts committed in the course of administering a trust, or for obligations arising from ownership or control of trust property, including liability for violation of environmental law, only if the trustee is personally at fault.

A claim based on a contract entered into by a trustee in the trustee's fiduciary capacity, on an obligation arising from ownership or control of trust property, or on a tort committed in the course of administering a trust, may be asserted in a judicial proceeding against the trustee in the trustee's fiduciary capacity, whether or not the trustee is personally liable for the claim.

If you have any questions about Trustee liability or breach of Trust, please contact us.]]>Wed, 02 Jul 2014 00:00:00 GMTBlogshttps://oldtownattorney.com/lawyer/2014/07/02/Trusts/Breach-of-Trust-Damages--Attorneys-Fees_bl14200.htm
The amount need to restore the value of the trust property and trust distributions to what they should have been, or
The amount of any profit made by the Trustee from the breach. The Trustee is liable for the greater of the two above amounts, as opposed to the lesser. However, the beneficiary will need to establish that (i) a breach has occurred and (ii) that the breach has resulted in a loss in trust property, improper trust distributions or an economic benefit to the Trustee.

Trustees have many duties that they owe beneficiaries and frequently are in breach. If you are a Trustee and would like a consultation on your duties, or a beneficiary who believes that a breach has occurred, please contact us.

Virginia Code Section 64.2-793 Damages for breach of Trust
A. A trustee who commits a breach of trust is liable to the beneficiaries affected for the greater of:

1. The amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred; or

2. The profit the trustee made by reason of the breach.

B. Except as otherwise provided in this subsection, if more than one trustee is liable to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the other trustee or trustees. A trustee is not entitled to contribution if the trustee was substantially more at fault than another trustee or if the trustee committed the breach of trust in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries. A trustee who received a benefit from the breach of trust is not entitled to contribution from another trustee to the extent of the benefit received.

Virginia Code Section 64.2-795 Attorney Fees & Costs
In a judicial proceeding involving the administration of a trust, the court, as justice and equity may require, may award costs and expenses, including reasonable attorney fees, to any party, to be paid by another party or from the trust that is the subject of the controversy.]]>Wed, 02 Jul 2014 00:00:00 GMTBlogshttps://oldtownattorney.com/lawyer/2014/07/02/Trusts/Trust-Law-Suits-Statute-of-Limitations_bl14201.htm
If there is no adequate disclosure, then the statute of limitations for trust breaches is generally five years from the first of the following to occur;

1. The removal, resignation, or death of the trustee;

2. The termination of the beneficiary's interest in the trust; or

3. The termination of the trust.

However, in circumstances of fraud, the statute of limitations can be extended. Because the statute of limitations may vary, and the time that the clock begins to run depends on the circumstances. It is critical that a beneficiary act quickly when they determine that a breach of trust had occurred.

If you are a Trustee who is worried they have committed a breach of Trust, and wants to minimize their exposure, or a beneficiary who believes a breach of Trust has occurred, please contact us.

Virginia Code Section 64.2-796
A. A beneficiary may not commence a proceeding against a trustee for breach of trust more than one year after the date the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust and informed the beneficiary of the time allowed for commencing a proceeding.

B. A report adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the beneficiary or representative knows of the potential claim or should have inquired into its existence.

C. If subsection A does not apply, a judicial proceeding by a beneficiary against a trustee for breach of trust shall be commenced within five years after the first to occur of:

1. The removal, resignation, or death of the trustee;

2. The termination of the beneficiary's interest in the trust; or

3. The termination of the trust.

D. Whenever fraud has been perpetrated in connection with any proceeding or in any statement filed under this chapter, or if fraud is used to avoid or circumvent the provisions or purposes of this chapter, any person injured thereby may obtain appropriate relief against the perpetrator of the fraud or restitution from any person benefiting from the fraud, whether innocent or not, except for a bona fide purchaser. Any proceeding shall be commenced within two years after the fraud is discovered, but no proceeding may be brought against one not a perpetrator of the fraud later than five years after the time the fraud is committed. This section does not apply to remedies for fraud practiced on a decedent during his lifetime that affects the succession of his estate.

E. The provisions of this section shall not operate to reduce the period of limitations applicable to actions and suits governed by § 8.01-245.]]>Wed, 02 Jul 2014 00:00:00 GMTBlogshttps://oldtownattorney.com/lawyer/2014/07/02/Trusts/Trustee-Duties-Remedies-for-Trustee-Breach-of-Trust_bl14202.htm
When a breach of Trust has occurred, the court may compel the Trustee to perform certain duties, enjoin the Trustee from committing a breach of Trust, or compel the Trustee to pay money, restore property, or take other actions intended to redress the breach.

In addition, when the Trustee has failed to provide adequate financial information, or has taken (or not taken) action that brings the trust property into question, the court may order the Trustee to provide an accounting.

If the breach is significant enough, or circumstances otherwise dictate, the court may remove the Trustee and appoint another Trustee to administer the Trust. The appointed or removed trustee may or may not be a successor Trustee under the Trust instrument.

All Trustees should obtain legal counsel to help reduce their otherwise significant exposure to liability. Generally, Trustees may retain an attorney as an expense of Trust Administration. However, exceptions due apply.

Note: A Trustee who acts in reasonable reliance on the terms of the Trust as expressed in the trust instrument is not liable to a beneficiary for a breach of Trust to the extent the breach resulted from the reliance.

If you are a Trustee who would like a consultation, or are a beneficiary who believes a Trustee is acting improperly, please contact us.

Virginia Code Section 64.2-792 Remedies for breach of Trust
A. A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.

B. To remedy a breach of trust that has occurred or may occur, the court may:

1. Compel the trustee to perform the trustee's duties;

2. Enjoin the trustee from committing a breach of trust;

3. Compel the trustee to redress a breach of trust by paying money, restoring property, or other means;

4. Order a trustee to account;

5. Appoint a special fiduciary to take possession of the trust property and administer the trust;

6. Suspend the trustee;

7. Remove the trustee as provided in § 64.2-759;

8. Reduce or deny compensation to the trustee;

9. Subject to § 64.2-803, void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and recover the property or its proceeds; or

10. Order any other appropriate relief.]]>Wed, 02 Jul 2014 00:00:00 GMTBlogshttps://oldtownattorney.com/lawyer/2014/07/02/Trusts/Subjecting-Trusts--Trust-Beneficiaries-to-Virginia-Jurisdictional-Law_bl14203.htm
By accepting the trusteeship of a trust having its principal place of administration in the Commonwealth or by moving the principal place of administration to the Commonwealth, the trustee submits personally to the jurisdiction of the courts of the Commonwealth regarding any matter involving the trust.

With respect to their interests in the trust, the beneficiaries of a trust having its principal place of administration in the Commonwealth are subject to the jurisdiction of the courts of the Commonwealth regarding any matter involving the trust. By accepting a distribution from such a trust, the recipient submits personally to the jurisdiction of the courts of the Commonwealth regarding any matter involving the trust.

There are also other methods of obtaining jurisdiction over a trustee, beneficiary, or other person receiving property from the trust.]]>Wed, 02 Jul 2014 00:00:00 GMTBlogshttps://oldtownattorney.com/lawyer/2014/07/02/Trusts/Trustee-Vacancy-What-Happens-Next-_bl14204.htmWhat is a Trustee Vacancy?
A vacancy in a trusteeship occurs if:

1. A person designated as trustee rejects the trusteeship;
2. A person designated as trustee cannot be identified or does not exist;
3. A trustee resigns;
4. A trustee is disqualified or removed;
5. A trustee dies; or
6. An individual serving as trustee is adjudicated an incapacitated person.

Trustee Vacancy: Generally
If one or more cotrustees remain in office, a vacancy in a trusteeship need not be filled. A vacancy in a trusteeship shall be filled if the trust has no remaining trustee.

Whether or not a vacancy in a trusteeship exists or is required to be filled, the court may appoint an additional trustee or special fiduciary whenever the court considers the appointment necessary for the administration of the trust.

A successor or surviving trustee shall succeed to all the rights, powers, and privileges, and shall be subject to all the duties, liabilities, and responsibilities imposed upon the original trustee without regard to the nature of discretionary powers conferred by the instrument, unless the trust instrument expressly provides to the contrary, or unless an order appointing the successor trustee provides otherwise.

Trustee Vacancy: Non-Charitable Trusts
A vacancy in a trusteeship of a noncharitable trust that is required to be filled shall be filled in the following order of priority:

1. By a person designated pursuant to the terms of the trust to act as successor trustee;
2. By a person appointed by unanimous agreement of the qualified beneficiaries; or
3. By a person appointed by the court pursuant to §§ 64.2-1405 and 64.2-1406, or pursuant to § 64.2-712.

Trustee Vacancy: Charitable Trusts
A vacancy in a trusteeship of a charitable trust that is required to be filled shall be filled in the following order of priority:

1. By a person designated pursuant to the terms of the trust to act as successor trustee;
2. By a person selected by the charitable organizations expressly designated to receive distributions under the terms of the trust, subject, however, to the concurrence of the Attorney General in any case in which he has previously requested of an organization so designated that he be consulted regarding the selection of successor; or
3. By a person appointed by the court pursuant to §§ 64.2-1405 and 64.2-1406, or pursuant to § 64.2-712.]]>Wed, 02 Jul 2014 00:00:00 GMTBlogshttps://oldtownattorney.com/lawyer/2014/07/02/Trusts/Mandatory-Trust-Rules-When-Your-Trust-Terms-Are-Unenforceable_bl14205.htmMandatory Trust Rules: When Your Trust Terms Are Unenforceable
Serving as a Trustee can be a difficult thankless job that exposes the Trustee to significant liability. Because Trust rules are so complex and difficult to understand, all Trustees should retain an attorney when serving as Trustee of the Trust.

A perfect example of the complexity concerns weather the Trustee can rely on the Trust terms.

What happens when the Trust terms are contrary to the law?
Many Trustees assume that they can just follow the terms of the Trust and be in compliance with the law. However, many Trustees don’t realize that certain provisions of the law override the Trust Instrument.

For example, the Virginia Code 64.2-703 provides that the Code prevails over the Trust terms as it relates to:

1. The requirements for creating a valid Trust;
2. The duty of a Trustee to act in good faith and in accordance with the terms and purposes of the Trust and the interests of the beneficiaries;
3. The requirement that a Trust and its terms be for the benefit of its beneficiaries, and that the Trust have a purpose that is lawful, not contrary to public policy, and possible to achieve;
4. The power of the court to modify or terminate a Trust under §§ 64.2-728 through 64.2-734;
5. The effect of a spendthrift provision and the rights of certain creditors and assignees to reach a Trust as provided in Article 5 (§ 64.2-742 et seq.);
6. The power of the court under § 64.2-755 to require, dispense with, or modify or terminate a bond;
7. The power of the court under subsection B of § 64.2-761 to adjust a Trustee's compensation specified in the terms of the Trust that is unreasonably low or high;
8. The effect of an exculpatory term under § 64.2-799;
9. The rights under §§ 64.2-801 through 64.2-804 of a person other than a Trustee or beneficiary;
10. Periods of limitation for commencing a judicial proceeding; and

The power of the court to take such action and exercise such jurisdiction as may be necessary in the interests of justice.
Because Trust law is so complex, it is critical that the Trustee contact a Trust attorney before accepting the Trusteeship to have the Trust reviewed to see if the Trust terms are in conflict of the law.

If you would like us to review your Trust instrument to determine what terms conflict with the Virginia code, please contact us.]]>Wed, 02 Jul 2014 00:00:00 GMTBlogshttps://oldtownattorney.com/lawyer/2014/07/02/Trusts/Trust-Document-Certificate-of-Trust_bl14206.htmWhat does a Certificate of Trust do?
A certificate of trust is a basic ancillary trust document designed to protect the privacy of the trust and its terms.

Why use a Certificate of Trust?
By using a certificate of trust, you may be able to keep the trust more private. In addition, you may be able to pass liability on to a party requesting trust information.

When should you use a Certificate of Trust?
If a bank, financial advisor, or other person requests a copy of the trust instrument, you should consider offering them a certificate of trust in lieu of providing them any copies of the trust pages.

What happens if the Certificate of Trust isn’t enough?
If a person dealing with a trustee refuses to accept a duly executed certificate of trust, that person may have exposed themselves to liability for any losses that result if their demand for further trust instrument wasn’t made in good faith.

How does a Certificate of Trust work?
Instead of furnishing a copy of the trust instrument to a person other than a beneficiary, the trustee may be able to furnish to said person a certification of trust containing the following trust information:

1. That the trust exists and the date the trust instrument was executed;
2. The identity of the settlor;
3. The identity and address of the currently acting trustee;
4. The powers of the trustee;
5. The revocability or irrevocability of the trust and the identity of any person holding a power to revoke the trust;
6. The authority of cotrustees to sign or otherwise authenticate and whether all or less than all are required in order to exercise powers of the trustee;
7. The trust's taxpayer identification number; and

The manner of taking title to trust property.
A certification of trust may be signed or otherwise authenticated by any trustee.

A certification of trust shall state that the trust has not been revoked, modified, or amended in any manner that would cause the representations contained in the certification of trust to be incorrect.

A certification of trust need not contain the dispositive terms of a trust.

A recipient of a certification of trust may require the trustee to furnish copies of those excerpts from the original trust instrument and later amendments that designate the trustee and confer upon the trustee the power to act in the pending transaction.

A person who acts in reliance upon a certification of trust without knowledge that the representations contained therein are incorrect is not liable to any person for so acting and may assume without inquiry the existence of the facts contained in the certification. Knowledge of the terms of the trust may not be inferred solely from the fact that a copy of all or part of the trust instrument is held by the person relying upon the certification.

A person who in good faith enters into a transaction in reliance upon a certification of trust may enforce the transaction against the trust property as if the representations contained in the certification were correct.

A person making a demand for the trust instrument in addition to a certification of trust or excerpts is liable for damages if the court determines that the person did not act in good faith in demanding the trust instrument.

A person may still be able to obtain a copy of the trust instrument in a judicial proceeding concerning the trust.]]>Wed, 02 Jul 2014 00:00:00 GMTBlogs