Vermont § 802 - Duty of loyalty

§ 802. Duty of loyalty

• (a) A trustee shall administer the trust solely in the interests of the beneficiaries. (b) Subject to the rights of persons dealing with or assisting the trustee as provided
  in section 1012 of this title, a sale, encumbrance, or other transaction involving the investment or management
  of trust property entered into by the trustee for the trustee’s own personal account
  or which is otherwise affected by a conflict between the trustee’s fiduciary and personal
  interests is voidable by a beneficiary affected by the transaction unless: (1) the transaction was authorized by the terms of the trust; (2) the transaction was approved by the Probate Division of the Superior Court; (3) the beneficiary did not commence a judicial proceeding within the time allowed by
  section 1005 of this title; (4) the beneficiary consented to the trustee’s conduct, ratified the transaction, or released
  the trustee in compliance with section 1009 of this title; (5) the transaction involves a contract entered into or claim acquired by the trustee
  before the person became or contemplated becoming trustee; or (6) the transaction was consented to in writing by a settlor of the trust while the trust
  was revocable. (c) A sale, encumbrance, or other transaction involving the investment or management of
  trust property is presumed to be affected by a conflict between personal and fiduciary
  interests if it is entered into by the trustee with: (1) the trustee’s spouse; (2) the trustee’s descendants, siblings, parents, or their spouses; (3) an agent or attorney of the trustee; or (4) a corporation or other person or enterprise in which the trustee, or a person that
  owns a significant interest in the trustee, has an interest that might affect the
  trustee’s best judgment. (d) A transaction between a trustee and a beneficiary that does not concern trust property
  but that occurs during the existence of the trust or while the trustee retains significant
  influence over the beneficiary and from which the trustee obtains an advantage is
  voidable by the beneficiary unless the trustee establishes that the transaction was
  fair to the beneficiary. (e) A transaction not concerning trust property in which the trustee engages in the trustee’s
  individual capacity involves a conflict between personal and fiduciary interests if
  the transaction concerns an opportunity properly belonging to the trust. (f) An investment by a trustee in securities of an investment company or investment trust
  to which the trustee, or its affiliate, provides services in a capacity other than
  as trustee is not presumed to be affected by a conflict between personal and fiduciary
  interests if the investment is fairly priced and otherwise complies with the prudent
  investor rule of chapter 9 of this title. In addition to its compensation for acting
  as trustee, the trustee may be compensated by the investment company or investment
  trust for providing those services out of fees charged to the trust. If the trustee
  receives compensation from the investment company or investment trust for providing
  investment advisory or investment management services, the trustee must include in
  the trustee’s annual report the rate and method by which that compensation was determined. (g) In voting shares of stock or in exercising powers of control over similar interests
  in other forms of enterprise, the trustee shall act in the best interests of the beneficiaries.
  If the trust is the sole owner of a corporation or other form of enterprise, the trustee
  shall elect or appoint directors or other managers who will manage the corporation
  or enterprise in the best interests of the beneficiaries. (h) This section does not preclude the following transactions, if fair to the beneficiaries: (1) an agreement between a trustee and a beneficiary relating to the appointment or compensation
  of the trustee; (2) payment of reasonable compensation to the trustee; (3) a transaction between a trust and another trust, decedent’s estate, or guardianship
  of which the trustee is a fiduciary or in which a beneficiary has an interest; (4) a deposit of trust money in a regulated financial-service institution operated by
  the trustee; or (5) an advance by the trustee of money for the protection of the trust. (i) The Probate Division of the Superior Court may appoint a special fiduciary to make
  a decision with respect to any proposed transaction that might violate this section
  if entered into by the trustee. (Added 2009, No. 20, § 1; amended 2009, No. 92 (Adj. Sess.), § 9; 2009, No. 154 (Adj. Sess.), § 236, eff. February 1, 2011.)