Vermont § 3325 - Judicial control of discretionary power

§ 3325. Judicial control of discretionary power

• (a) The court may not order a fiduciary to change a decision to exercise or not to exercise
  a discretionary power conferred by this chapter unless it determines that the decision
  was an abuse of the fiduciary’s discretion. A fiduciary’s decision is not an abuse
  of discretion merely because the court would have exercised the power in a different
  manner or would not have exercised the power. (b) The decisions to which subsection (a) of this section applies include: (1) a decision under subsection 3324(a) of this title as to whether and to what extent an amount should be transferred from principal to
  income or from income to principal; and (2) a decision regarding the factors that are relevant to the trust and its beneficiaries,
  the extent to which the factors are relevant, and the weight, if any, to be given
  to those factors, in deciding whether and to what extent to exercise the discretionary
  power conferred by subsection 3324(a) of this title. (c) If the court determines that a fiduciary has abused the fiduciary’s discretion, the
  court may place the income and remainder beneficiaries in the positions they would
  have occupied if the discretion had not been abused, according to the following rules: (1) To the extent that the abuse of discretion has resulted in no distribution to a beneficiary
  or in a distribution that is too small, the court shall order the fiduciary to distribute
  from the trust to the beneficiary an amount that the court determines will restore
  the beneficiary, in whole or in part, to the beneficiary’s appropriate position. (2) To the extent that the abuse of discretion has resulted in a distribution to a beneficiary
  which is too large, the court shall place the beneficiaries, the trust, or both, in
  whole or in part, in their appropriate positions by ordering the fiduciary to withhold
  an amount from one or more future distributions to the beneficiary who received the
  distribution that was too large or ordering that beneficiary to return some or all
  of the distribution to the trust. (3) To the extent that the court is unable, after applying subdivisions (1) and (2) of
  this subsection, to place the beneficiaries or the trust or both in the positions
  they would have occupied if the discretion had not been abused, the court may order
  the fiduciary to pay an appropriate amount from its own funds to one or more of the
  beneficiaries or the trust or both. (d) Upon petition by the fiduciary, the court having jurisdiction over a trust or estate
  shall determine whether a proposed exercise or nonexercise by the fiduciary of a discretionary
  power conferred by this chapter will result in an abuse of the fiduciary’s discretion.
  If the petition describes the proposed exercise or nonexercise of the power and contains
  sufficient information to inform the beneficiaries of the reasons for the proposal,
  the facts upon which the fiduciary relies, and an explanation of how the income and
  remainder beneficiaries will be affected by the proposed exercise or nonexercise of
  the power, a beneficiary who challenges the proposed exercise or nonexercise has the
  burden of establishing that it will result in an abuse of discretion. (Added 2011, No. 114 (Adj. Sess.), § 1.)