SEARCH SITE
VIRGINIA LAW PORTAL
- Code of Virginia
- Virginia Administrative Code
- Constitution of Virginia
- Charters
- Authorities
- Compacts
- Uncodified Acts
- RIS Users (account required)
SEARCHABLE DATABASES
- Bills & Resolutions
session legislation - Bill Summaries
session summaries - Reports to the General Assembly
House and Senate documents - Legislative Liaisons
State agency contacts
ACROSS SESSIONS
- Subject Index: Since 1995
- Bills & Resolutions: Since 1994
- Summaries: Since 1994
Developed and maintained by the Division of Legislative Automated Systems.
1996 SESSION
962221204Be it enacted by the General Assembly of Virginia:
1. That § 55-19.4 of the Code of Virginia is amended and reenacted as follows:
§ 55-19.4. Petition for reformation of trust.
A. Upon petition by a trustee, personal representative or beneficiary in the
circuit court in which the trustee or personal representative qualified, or if
there is no such qualification, the circuit court for the jurisdiction in which
the trustee, personal representative or beneficiary resides, or if the trustee
is a corporate trustee and there is no resident beneficiary, the circuit court
where the trust account is administered, the circuit court may, for good cause
shown, reform modify a trust in any manner, including,
without limitation, dividing a trust into two or more separate trusts,
consolidating two or more separate trusts into a single trust, or terminating
the trust and ordering distribution of the trust property regardless of
anyexcept when the testator has included a
spendthrift or similar protective provision.
B. Before taking any action permitted under subsection A, the court must first find that:
1. In the case of consolidation, the dispositive provisions of the trusts to be consolidated are substantially similar; and
2. In the case of any reformation other than
modification, including termination, such action will neither (i)
materially impair the accomplishment of the trust purposes nor (ii) adversely
affect the interests of any beneficiary.
C. The court may order that the reformation modification
be effective prospectively only or be retroactive to the date of the
trust's creation, the date of death of the trustor or testator or such other
date as the court may direct. The court may make such other and further orders
as the court deems proper to protect the interests of the beneficiaries, the
trustee, the personal representative, or any party in interest. The court may
order distribution of the interest of a minor or incapacitated beneficiary, or
any portion thereof, upon termination or other
reformationmodification of a trust, to a
custodian under the Virginia Uniform Transfers to Minors Act (§ 31-37 et
seq.) or to a custodial trustee under the Virginia Uniform Custodial Trust Act
(§ 55-34.1 et seq.).
D. In the interpretation, construction and application of this section, the following rules shall apply:
1. For purposes of any
reformationmodification
of a trust, good cause may be shown by evidence of (i) changes in any federal
or Virginia tax laws, or the construction of such laws, whether by statute,
court decision, regulation, ruling or otherwise, which, in the absence of
reformationmodification, would materially impair the purposes
of the trust or adversely affect the interests of the trustor or any
beneficiary, or which, if reformation modification were
made, would materially benefit the trust or the interests of the trustor or any
beneficiary or (ii) existing circumstances such that the purposes of the trust
will be impaired or the interests of the trustor or any beneficiary adversely
affected if the reformation modification is not made or
that reformation modification if made would benefit the
trust or interests of the trustor or any beneficiary.
2. For purposes of termination of a trust, good cause may be shown as set forth
in subdivision 1 of this subsection or by evidence that (i) the
costs of administration are such that the establishment or the continuance of
the trust would impair the purposes of the trust or (ii) the value of the
trust principal is $25,000 or less, with no expectation of additions to the
principal other than from interest or other earnings.
3. Any beneficiary or other party in interest to the proceeding may execute a
written waiver of any requirement for reformation modification
of a trust, whether pursuant to this section or by the court, provided
such waiver shall apply only to such party's interest in the trust.
E. This section shall apply to all trusts, whether inter vivos or testamentary, whether created by the same or different instruments or by the same or different persons, and regardless of the time, place or method of creation or administration.
F. This section shall not be construed to restrict or limit the right of a trustee or personal representative, acting in such capacity, to divide, consolidate, terminate or otherwise reform trusts without judicial approval in accordance with applicable provisions of the governing instrument or existing law.