§ 64.1-57. Incorporation by reference of certain powers of fiduciaries intowill or trust instrument.
(1) The following powers, in addition to all other powers granted by law, maybe incorporated in whole or in part in any will or trust instrument byreference to this section:
(a) To keep and retain any or all investments and property, real, personal ormixed, including stock in the fiduciary institution, if the same be acorporation, as they may be at the time they come into the custody of saidfiduciary, regardless of the character of same or whether they are such asthen would be authorized by law for investment by fiduciaries or whether adisproportionately large part of the trust or estate remains invested in oneor more types of property, for such time as the fiduciary shall deem best,and to dispose of such property by sale, exchange, or otherwise as and whensuch fiduciary shall deem advisable.
(a1) At the discretion of the fiduciary, to receive additions to the estatefrom any source, in cash or in kind, and to hold, administer and distributesuch additions as a part of and under the same terms and conditions as theestate then currently held.
(b) To sell, assign, exchange, transfer and convey or otherwise dispose of,any or all of the investments and property, either real, personal or mixed,which may be included in, or may at any time become part of the trust orestate upon such terms and conditions as the fiduciary, in his absolutediscretion, may deem advisable, at either public or private sale, either forcash or deferred payments or other consideration, as such fiduciary maydetermine; and for the purpose of selling, assigning, exchanging,transferring or conveying the same, to make, execute, acknowledge and deliverany and all instruments of conveyance, deeds of trust, or assignments in suchform and with warranties and covenants as such fiduciary may deem expedientand proper; and in the event of any sale, conveyance, exchange, or otherdisposition of any of the trust or estate, the purchaser shall not beobligated in any way to see to the application of the purchase money or otherconsideration passing in connection therewith.
(b1) To grant, sell, transfer, exchange, purchase or acquire options of anykind on property held by such trust or estate or acquired or to be acquiredby such trust or estate or held or owned by any other person.
(c), (c1) [Repealed.]
(d) To lease any or all of the real estate, which may be included in or atany time become a part of the trust or estate, upon such terms and conditionsas said fiduciary, in his sole judgment and discretion, may deem advisable,and any lease or leases made by such fiduciary may extend beyond the term ofthe trust or administration of the estate and for the purpose of leasing saidreal estate, to make, execute, acknowledge and deliver any and allinstruments, in such form and with such covenants and warranties as suchfiduciary may deem expedient and proper.
(e) To vote any stocks, bonds, or other securities held by such fiduciary atany meeting of stockholders, bondholders, or other security holders, and todelegate the power to so vote to attorneys-in-fact or proxies under power ofattorney, restricted or unrestricted.
(f) To borrow money for such periods of time and upon such terms andconditions as to rates, maturities, renewals and security as to suchfiduciary shall seem advisable, including the power to borrow from thefiduciary, if the fiduciary be a bank, for the purpose of paying debts, taxesor other charges against the trust or estate or any part thereof, and withprior approval of the court for any proper purpose of the trust or estate,and to mortgage or pledge such portion of the trust or estate as may berequired to secure such loan or loans; and as maker or endorser to renewexisting loans.
(f1) To make loans or advancements to the executor or other representative ofthe grantor's estate in case such executor or other representative is in needof cash with which to pay taxes, claims or other indebtedness of thegrantor's estate; but no assets acquired from a qualified retirement benefitplan under § 2039 (c) of the Internal Revenue Code shall be so used, and suchassets shall be segregated and held separately until all claims against theestate for debts of the decedent or claims of administration have beensatisfied. Such loans or advancements may be secured or unsecured, and thetrustee shall not be liable in any way for any loss resulting to the trust orestate by reason of the exercise of this authority.
(g) To compromise, adjust, arbitrate, sue on or defend, abandon, or otherwisedeal with and settle claims, in favor of or against the trust or estate asthe fiduciary shall deem best, and his decision shall be conclusive.
(h) To make distributions in cash or in kind or partly in each at valuationsto be determined by the fiduciary, whose decision as to values shall beconclusive.
(i), (i1) [Repealed.]
(j) To repair, alter, improve, renovate, reconstruct and demolish any of thebuildings on the real estate held by such fiduciary and to construct suchbuildings and improvements thereon as such fiduciary may, in his discretion,deem advisable.
(k) To employ and compensate, out of the principal or the income or both asto the fiduciary shall seem proper, agents, accountants, brokers,attorneys-in-fact, attorneys-at-law, tax specialists, licensed real estatebrokers, licensed salesmen and other assistants and advisors deemed by thefiduciary needful for the proper administration of the trust or estate, andto do so without liability for any neglect, omission, misconduct, or defaultof any such agent or professional representative provided he was selected andretained with reasonable care.
(l) To rely upon any affidavit, certificate, letter, notice, telegram, orother paper or upon any telephone conversation believed by such fiduciary tobe genuine and upon any other evidence believed by such fiduciary to besufficient, and to be protected and saved harmless in all payments ordistributions required to be made hereunder if made in good faith and withoutactual notice or knowledge of the changed condition or status of any personreceiving payments or other distributions upon a condition.
(m) To retain any interest held by such fiduciary in any business, whether asa stockholder or security holder of a corporation, a partner, a soleproprietor, or otherwise, for any length of time, without limitations, solelyat the risk of the trust or estate and without liability on the part of thefiduciary for any losses resulting therefrom; to participate in the conductof such business and take or delegate to others discretionary power to takeany action with respect to its management and affairs which an individualcould take as the owner of such business, including the voting of stock, andthe determination of any or all questions of policy; to participate in anyincorporation, reorganization, merger, consolidation, recapitalization orliquidation thereof; to invest additional capital in, subscribe to additionalstock or securities of, and loan money or credit with or without security to,such business out of the trust or estate property; to elect or employ asdirectors, officers, employees or agents of such business, and compensate,any persons, including the fiduciary or a director, officer, or agent of thefiduciary; to accept as correct financial or other statements rendered by thebusiness from time to time as to his conditions and operations except whenhaving actual notice to the contrary; to regard the business as an entityseparate from the trust or estate with no duty to account to any court as tohis operations; to deal with and act for the business in any capacity,including any banking or trust capacity and the loaning of money out of thefiduciary's own funds, and to be compensated therefor; and to sell orliquidate such interest or any part thereof at any time. If any businessshall be unincorporated, contractual and tort liabilities arising out of suchbusiness shall be satisfied, first, out of the business, and second, out ofthe trust or estate; but it is intended that in no event shall there be aliability of the fiduciary, and if the fiduciary shall be held liable, suchfiduciary shall be entitled to indemnification from the business and thetrust or estate in the order named. Such fiduciary shall be entitled to suchadditional compensation as is commensurate with the time, effort, andresponsibility involved in his performance of services with respect to suchbusiness. Such compensation for services rendered to the business may be paidby such fiduciary from the business or from other assets or from both as thefiduciary, in his discretion, may determine to be advisable; the amount ofsuch additional compensation, however, shall be subject to the final approvalof the court.
(n) To do all other acts and things not inconsistent with the provisions ofthe will or trust in which these powers are incorporated which such fiduciarymay deem necessary or desirable for the proper management of the trustsherein created, in the same manner and to the same extent as an individualmight or could do with respect to his own property.
(o) To hold property in his name or in the name of nominees.
(p) During the minority, incapacity or the disability of any beneficiary, thefiduciary may, in his sole discretion, distribute income and principal tosuch beneficiary in any one of the following ways: (1) directly to saidbeneficiary; (2) to a relative, friend, guardian, conservator or committee,to be expended by such person for the education, maintenance, support orbenefit of said beneficiary; (3) by himself expending the same for theeducation, maintenance, support or benefit of said beneficiary; (4) to anadult person or bank authorized to exercise trust powers as custodian for aminor beneficiary under the Uniform Transfers to Minors Act (§ 31-37 et seq.)to be held by such custodian under the terms of such act; or (5) to an adultperson or bank authorized to exercise trust powers as custodial trustee for abeneficiary who is incapacitated as defined in § 55-34.1, under the UniformCustodial Trust Act (§ 55-34.1 et seq.) to be held as custodial trustee underthe terms of such act.
(q) To continue and carry on any farming operation transferred to him and tooperate such farms and any other farm which may be acquired and, in so doing,by way of illustration and not in limitation of his powers, to operate thefarm with hired labor, tenants or sharecroppers; to hire a farm manager or aprofessional farm management service to supervise the farming operations; tolease or rent the farm for cash or for a share of the crops; to purchase orotherwise acquire farm machinery and equipment and livestock; to construct,repair and improve farm buildings of all sorts needed, in its judgment, forthe operation of the farm; to make loans or advances or to obtain such fromany source, including the fiduciary at the prevailing rate or rates ofinterest for farm purposes such as for production, harvesting, or marketing,or for the construction, repair, or improvement of farm buildings or for thepurchase of farm machinery or equipment or livestock; to employ approved soilconservation practices in order to conserve, improve and maintain thefertility and productivity of the soil; to protect, manage and improve thetimber and forest on the farm and sell the timber and forest products when itis to the best interest of the estate or trust; to ditch and drain damp orwet fields and areas of the farm when and where needed; to engage inlivestock production, if it is deemed advisable, and to construct such fencesand buildings and plant such pastures and crops as may be necessary to carryon such a livestock program; to execute contracts, notes and chattelmortgages relating to agriculture with the Commodity Credit Corporation, theUnited States Secretary of Agriculture or any other officer or agency of thefederal or state governments, to enter into acreage reduction agreements, tomake soil conservation commitments, and to do all acts necessary to cooperatewith any governmental agricultural program; and in general, to employ themethods of carrying on the farming operation that are in common use by thecommunity in which the farm is located, inasmuch as the duties the fiduciaryis requested to assume with respect to farming operations may considerablyenlarge and increase his usual responsibility and work as fiduciary, it isagreed that the fiduciary shall be entitled to such additional reasonablecompensation as is commensurate with the time, effort and responsibilityinvolved in his performance of such services.
(r) To purchase and hold policies of life insurance on the life of anybeneficiary, or any person in whom the beneficiary has an insurable interest,and pay the premiums thereon out of income or principal as he deemsappropriate; provided, however, that the decision of the beneficiary of anytrust otherwise meeting the requirements of § 2056 (b) (5) of the InternalRevenue Code of 1954, as amended, shall control in respect to the purchase orholding of a policy of life insurance by the trustee of such trust.
(s) To make any election authorized under any law requiring, or relating tothe requirement for, payment of any taxes or assessments on assets or incomeof the estate or in connection with any fiduciary capacity, regardless ofwhether any property or income is received by or is under the control of thefiduciary, including, but not limited to, elections concerning the timing ofpayment of any such tax or assessment, the valuation of any property subjectto any such tax or assessment, the alternative use of items of deduction incomputing any tax or assessment and including specifically electionspermitted by statutes enacted after the date of execution of the will ortrust instrument.
(t) To comply with environmental law:
1. To inspect property held by the fiduciary, including interests in soleproprietorships, partnerships, or corporations and any assets owned by anysuch business enterprise, for the purpose of determining compliance withenvironmental law affecting such property and to respond to a change in, orany actual or threatened violation of, any environmental law affectingproperty held by the fiduciary;
2. To take, on behalf of the estate or trust, any action necessary to respondto a change in, or prevent, abate, or otherwise remedy any actual orthreatened violation of, any environmental law affecting property held by thefiduciary, either before or after the initiation of an enforcement action byany governmental body;
3. To refuse to accept property in trust if the fiduciary determines that anyproperty to be transferred to the trust either is contaminated by anyhazardous substance or is being used or has been used for any activitydirectly or indirectly involving any hazardous substance which could resultin liability to the trust or otherwise impair the value of the assets heldtherein;
4. To disclaim any power granted by any document, statute, or rule of lawwhich, in the sole discretion of the fiduciary, may cause the fiduciary toincur personal liability under any environmental law;
5. To charge the cost of any inspection, review, abatement, response, cleanupor remedial action authorized herein against the income or principal of thetrust or estate;
6. For purposes of this subdivision, "environmental law" means any federal,state, or local law, rule, regulation, or ordinance relating to protection ofthe environment or human health and "hazardous substances" means anysubstances defined as hazardous or toxic or otherwise regulated by anyenvironmental law.
(u) To resign as a fiduciary if the fiduciary reasonably believes that thereis or may be a conflict of interest between it in its fiduciary capacity andin its individual capacity because of potential claims or liabilities whichmay be asserted against it on behalf of the trust or estate because of thetype or condition of assets held therein.
(2) As used in the section, the term "fiduciary" shall mean and include oneor more individuals or corporations having trust powers and the use of themale gender shall include the female; and any substitute, added or successorfiduciary shall have all of the powers hereby provided for the fiduciarynamed in the will or trust instrument. The provisions of this section may byreference hereto be made applicable to a fiduciary of the estate of adecedent as well as to the trustee of an inter vivos or testamentary trust.
(3) For the purposes of this section, unless the will or trust instrumentexpresses a contrary intention, the incorporation by reference of powersenumerated by this statute shall refer to those powers existing at the timeof death and reference to powers under the Uniform Gifts to Minors Act in aninstrument executed prior to July 1, 1989, shall be construed to refer to theUniform Transfers to Minors Act (§ 31-37 et seq.).
(4) This section is not intended and shall not be construed to affect theapplication of the standard of judgment and care as set forth in Article 2 (§26-45.3 et seq.) of Chapter 3 of Title 26.
(5) In the event that the will or trust instrument shall contain a provisionin favor of a surviving spouse of the testator or grantor, the powers aboveenumerated shall in no way be construed or interpreted in any fashion whichmight cause the bequest to fail to qualify for the marital deductionpermitted under the federal estate tax law, unless the will or trustinstrument shall specifically provide to the contrary. A fiduciary actingunder a construction or interpretation of a power, which action is otherwisereasonable under the circumstances, shall incur no responsibility for actstaken in good faith which are otherwise thereafter contended to be in afashion which might cause disqualification for the marital deduction. Theprovision of this subsection shall apply without regard to the time the willor trust was executed or probated or the testator died in relation to theeffective date of this section or amendments thereto.
(6) For the purposes of this section, the term "estate" shall include allinterests in the real or personal property of a decedent passing by will orby intestacy. This subsection is declarative of existing law.
(Code 1950, § 64-57.2; 1966, c. 425; 1968, c. 656; 1970, cc. 65, 296; 1972,c. 788; 1973, c. 94; 1974, c. 659; 1976, c. 419; 1982, cc. 525, 549, 551;1989, c. 736; 1990, c. 782; 1992, c. 584; 1994, c. 476; 1997, c. 801; 1999,cc. 772, 975; 2003, cc. 30, 42, 253.)
§ 64.1-57. Incorporation by reference of certain powers of fiduciaries intowill or trust instrument.
(1) The following powers, in addition to all other powers granted by law, maybe incorporated in whole or in part in any will or trust instrument byreference to this section:
(a) To keep and retain any or all investments and property, real, personal ormixed, including stock in the fiduciary institution, if the same be acorporation, as they may be at the time they come into the custody of saidfiduciary, regardless of the character of same or whether they are such asthen would be authorized by law for investment by fiduciaries or whether adisproportionately large part of the trust or estate remains invested in oneor more types of property, for such time as the fiduciary shall deem best,and to dispose of such property by sale, exchange, or otherwise as and whensuch fiduciary shall deem advisable.
(a1) At the discretion of the fiduciary, to receive additions to the estatefrom any source, in cash or in kind, and to hold, administer and distributesuch additions as a part of and under the same terms and conditions as theestate then currently held.
(b) To sell, assign, exchange, transfer and convey or otherwise dispose of,any or all of the investments and property, either real, personal or mixed,which may be included in, or may at any time become part of the trust orestate upon such terms and conditions as the fiduciary, in his absolutediscretion, may deem advisable, at either public or private sale, either forcash or deferred payments or other consideration, as such fiduciary maydetermine; and for the purpose of selling, assigning, exchanging,transferring or conveying the same, to make, execute, acknowledge and deliverany and all instruments of conveyance, deeds of trust, or assignments in suchform and with warranties and covenants as such fiduciary may deem expedientand proper; and in the event of any sale, conveyance, exchange, or otherdisposition of any of the trust or estate, the purchaser shall not beobligated in any way to see to the application of the purchase money or otherconsideration passing in connection therewith.
(b1) To grant, sell, transfer, exchange, purchase or acquire options of anykind on property held by such trust or estate or acquired or to be acquiredby such trust or estate or held or owned by any other person.
(c), (c1) [Repealed.]
(d) To lease any or all of the real estate, which may be included in or atany time become a part of the trust or estate, upon such terms and conditionsas said fiduciary, in his sole judgment and discretion, may deem advisable,and any lease or leases made by such fiduciary may extend beyond the term ofthe trust or administration of the estate and for the purpose of leasing saidreal estate, to make, execute, acknowledge and deliver any and allinstruments, in such form and with such covenants and warranties as suchfiduciary may deem expedient and proper.
(e) To vote any stocks, bonds, or other securities held by such fiduciary atany meeting of stockholders, bondholders, or other security holders, and todelegate the power to so vote to attorneys-in-fact or proxies under power ofattorney, restricted or unrestricted.
(f) To borrow money for such periods of time and upon such terms andconditions as to rates, maturities, renewals and security as to suchfiduciary shall seem advisable, including the power to borrow from thefiduciary, if the fiduciary be a bank, for the purpose of paying debts, taxesor other charges against the trust or estate or any part thereof, and withprior approval of the court for any proper purpose of the trust or estate,and to mortgage or pledge such portion of the trust or estate as may berequired to secure such loan or loans; and as maker or endorser to renewexisting loans.
(f1) To make loans or advancements to the executor or other representative ofthe grantor's estate in case such executor or other representative is in needof cash with which to pay taxes, claims or other indebtedness of thegrantor's estate; but no assets acquired from a qualified retirement benefitplan under § 2039 (c) of the Internal Revenue Code shall be so used, and suchassets shall be segregated and held separately until all claims against theestate for debts of the decedent or claims of administration have beensatisfied. Such loans or advancements may be secured or unsecured, and thetrustee shall not be liable in any way for any loss resulting to the trust orestate by reason of the exercise of this authority.
(g) To compromise, adjust, arbitrate, sue on or defend, abandon, or otherwisedeal with and settle claims, in favor of or against the trust or estate asthe fiduciary shall deem best, and his decision shall be conclusive.
(h) To make distributions in cash or in kind or partly in each at valuationsto be determined by the fiduciary, whose decision as to values shall beconclusive.
(i), (i1) [Repealed.]
(j) To repair, alter, improve, renovate, reconstruct and demolish any of thebuildings on the real estate held by such fiduciary and to construct suchbuildings and improvements thereon as such fiduciary may, in his discretion,deem advisable.
(k) To employ and compensate, out of the principal or the income or both asto the fiduciary shall seem proper, agents, accountants, brokers,attorneys-in-fact, attorneys-at-law, tax specialists, licensed real estatebrokers, licensed salesmen and other assistants and advisors deemed by thefiduciary needful for the proper administration of the trust or estate, andto do so without liability for any neglect, omission, misconduct, or defaultof any such agent or professional representative provided he was selected andretained with reasonable care.
(l) To rely upon any affidavit, certificate, letter, notice, telegram, orother paper or upon any telephone conversation believed by such fiduciary tobe genuine and upon any other evidence believed by such fiduciary to besufficient, and to be protected and saved harmless in all payments ordistributions required to be made hereunder if made in good faith and withoutactual notice or knowledge of the changed condition or status of any personreceiving payments or other distributions upon a condition.
(m) To retain any interest held by such fiduciary in any business, whether asa stockholder or security holder of a corporation, a partner, a soleproprietor, or otherwise, for any length of time, without limitations, solelyat the risk of the trust or estate and without liability on the part of thefiduciary for any losses resulting therefrom; to participate in the conductof such business and take or delegate to others discretionary power to takeany action with respect to its management and affairs which an individualcould take as the owner of such business, including the voting of stock, andthe determination of any or all questions of policy; to participate in anyincorporation, reorganization, merger, consolidation, recapitalization orliquidation thereof; to invest additional capital in, subscribe to additionalstock or securities of, and loan money or credit with or without security to,such business out of the trust or estate property; to elect or employ asdirectors, officers, employees or agents of such business, and compensate,any persons, including the fiduciary or a director, officer, or agent of thefiduciary; to accept as correct financial or other statements rendered by thebusiness from time to time as to his conditions and operations except whenhaving actual notice to the contrary; to regard the business as an entityseparate from the trust or estate with no duty to account to any court as tohis operations; to deal with and act for the business in any capacity,including any banking or trust capacity and the loaning of money out of thefiduciary's own funds, and to be compensated therefor; and to sell orliquidate such interest or any part thereof at any time. If any businessshall be unincorporated, contractual and tort liabilities arising out of suchbusiness shall be satisfied, first, out of the business, and second, out ofthe trust or estate; but it is intended that in no event shall there be aliability of the fiduciary, and if the fiduciary shall be held liable, suchfiduciary shall be entitled to indemnification from the business and thetrust or estate in the order named. Such fiduciary shall be entitled to suchadditional compensation as is commensurate with the time, effort, andresponsibility involved in his performance of services with respect to suchbusiness. Such compensation for services rendered to the business may be paidby such fiduciary from the business or from other assets or from both as thefiduciary, in his discretion, may determine to be advisable; the amount ofsuch additional compensation, however, shall be subject to the final approvalof the court.
(n) To do all other acts and things not inconsistent with the provisions ofthe will or trust in which these powers are incorporated which such fiduciarymay deem necessary or desirable for the proper management of the trustsherein created, in the same manner and to the same extent as an individualmight or could do with respect to his own property.
(o) To hold property in his name or in the name of nominees.
(p) During the minority, incapacity or the disability of any beneficiary, thefiduciary may, in his sole discretion, distribute income and principal tosuch beneficiary in any one of the following ways: (1) directly to saidbeneficiary; (2) to a relative, friend, guardian, conservator or committee,to be expended by such person for the education, maintenance, support orbenefit of said beneficiary; (3) by himself expending the same for theeducation, maintenance, support or benefit of said beneficiary; (4) to anadult person or bank authorized to exercise trust powers as custodian for aminor beneficiary under the Uniform Transfers to Minors Act (§ 31-37 et seq.)to be held by such custodian under the terms of such act; or (5) to an adultperson or bank authorized to exercise trust powers as custodial trustee for abeneficiary who is incapacitated as defined in § 55-34.1, under the UniformCustodial Trust Act (§ 55-34.1 et seq.) to be held as custodial trustee underthe terms of such act.
(q) To continue and carry on any farming operation transferred to him and tooperate such farms and any other farm which may be acquired and, in so doing,by way of illustration and not in limitation of his powers, to operate thefarm with hired labor, tenants or sharecroppers; to hire a farm manager or aprofessional farm management service to supervise the farming operations; tolease or rent the farm for cash or for a share of the crops; to purchase orotherwise acquire farm machinery and equipment and livestock; to construct,repair and improve farm buildings of all sorts needed, in its judgment, forthe operation of the farm; to make loans or advances or to obtain such fromany source, including the fiduciary at the prevailing rate or rates ofinterest for farm purposes such as for production, harvesting, or marketing,or for the construction, repair, or improvement of farm buildings or for thepurchase of farm machinery or equipment or livestock; to employ approved soilconservation practices in order to conserve, improve and maintain thefertility and productivity of the soil; to protect, manage and improve thetimber and forest on the farm and sell the timber and forest products when itis to the best interest of the estate or trust; to ditch and drain damp orwet fields and areas of the farm when and where needed; to engage inlivestock production, if it is deemed advisable, and to construct such fencesand buildings and plant such pastures and crops as may be necessary to carryon such a livestock program; to execute contracts, notes and chattelmortgages relating to agriculture with the Commodity Credit Corporation, theUnited States Secretary of Agriculture or any other officer or agency of thefederal or state governments, to enter into acreage reduction agreements, tomake soil conservation commitments, and to do all acts necessary to cooperatewith any governmental agricultural program; and in general, to employ themethods of carrying on the farming operation that are in common use by thecommunity in which the farm is located, inasmuch as the duties the fiduciaryis requested to assume with respect to farming operations may considerablyenlarge and increase his usual responsibility and work as fiduciary, it isagreed that the fiduciary shall be entitled to such additional reasonablecompensation as is commensurate with the time, effort and responsibilityinvolved in his performance of such services.
(r) To purchase and hold policies of life insurance on the life of anybeneficiary, or any person in whom the beneficiary has an insurable interest,and pay the premiums thereon out of income or principal as he deemsappropriate; provided, however, that the decision of the beneficiary of anytrust otherwise meeting the requirements of § 2056 (b) (5) of the InternalRevenue Code of 1954, as amended, shall control in respect to the purchase orholding of a policy of life insurance by the trustee of such trust.
(s) To make any election authorized under any law requiring, or relating tothe requirement for, payment of any taxes or assessments on assets or incomeof the estate or in connection with any fiduciary capacity, regardless ofwhether any property or income is received by or is under the control of thefiduciary, including, but not limited to, elections concerning the timing ofpayment of any such tax or assessment, the valuation of any property subjectto any such tax or assessment, the alternative use of items of deduction incomputing any tax or assessment and including specifically electionspermitted by statutes enacted after the date of execution of the will ortrust instrument.
(t) To comply with environmental law:
1. To inspect property held by the fiduciary, including interests in soleproprietorships, partnerships, or corporations and any assets owned by anysuch business enterprise, for the purpose of determining compliance withenvironmental law affecting such property and to respond to a change in, orany actual or threatened violation of, any environmental law affectingproperty held by the fiduciary;
2. To take, on behalf of the estate or trust, any action necessary to respondto a change in, or prevent, abate, or otherwise remedy any actual orthreatened violation of, any environmental law affecting property held by thefiduciary, either before or after the initiation of an enforcement action byany governmental body;
3. To refuse to accept property in trust if the fiduciary determines that anyproperty to be transferred to the trust either is contaminated by anyhazardous substance or is being used or has been used for any activitydirectly or indirectly involving any hazardous substance which could resultin liability to the trust or otherwise impair the value of the assets heldtherein;
4. To disclaim any power granted by any document, statute, or rule of lawwhich, in the sole discretion of the fiduciary, may cause the fiduciary toincur personal liability under any environmental law;
5. To charge the cost of any inspection, review, abatement, response, cleanupor remedial action authorized herein against the income or principal of thetrust or estate;
6. For purposes of this subdivision, "environmental law" means any federal,state, or local law, rule, regulation, or ordinance relating to protection ofthe environment or human health and "hazardous substances" means anysubstances defined as hazardous or toxic or otherwise regulated by anyenvironmental law.
(u) To resign as a fiduciary if the fiduciary reasonably believes that thereis or may be a conflict of interest between it in its fiduciary capacity andin its individual capacity because of potential claims or liabilities whichmay be asserted against it on behalf of the trust or estate because of thetype or condition of assets held therein.
(2) As used in the section, the term "fiduciary" shall mean and include oneor more individuals or corporations having trust powers and the use of themale gender shall include the female; and any substitute, added or successorfiduciary shall have all of the powers hereby provided for the fiduciarynamed in the will or trust instrument. The provisions of this section may byreference hereto be made applicable to a fiduciary of the estate of adecedent as well as to the trustee of an inter vivos or testamentary trust.
(3) For the purposes of this section, unless the will or trust instrumentexpresses a contrary intention, the incorporation by reference of powersenumerated by this statute shall refer to those powers existing at the timeof death and reference to powers under the Uniform Gifts to Minors Act in aninstrument executed prior to July 1, 1989, shall be construed to refer to theUniform Transfers to Minors Act (§ 31-37 et seq.).
(4) This section is not intended and shall not be construed to affect theapplication of the standard of judgment and care as set forth in Article 2 (§26-45.3 et seq.) of Chapter 3 of Title 26.
(5) In the event that the will or trust instrument shall contain a provisionin favor of a surviving spouse of the testator or grantor, the powers aboveenumerated shall in no way be construed or interpreted in any fashion whichmight cause the bequest to fail to qualify for the marital deductionpermitted under the federal estate tax law, unless the will or trustinstrument shall specifically provide to the contrary. A fiduciary actingunder a construction or interpretation of a power, which action is otherwisereasonable under the circumstances, shall incur no responsibility for actstaken in good faith which are otherwise thereafter contended to be in afashion which might cause disqualification for the marital deduction. Theprovision of this subsection shall apply without regard to the time the willor trust was executed or probated or the testator died in relation to theeffective date of this section or amendments thereto.
(6) For the purposes of this section, the term "estate" shall include allinterests in the real or personal property of a decedent passing by will orby intestacy. This subsection is declarative of existing law.
(Code 1950, § 64-57.2; 1966, c. 425; 1968, c. 656; 1970, cc. 65, 296; 1972,c. 788; 1973, c. 94; 1974, c. 659; 1976, c. 419; 1982, cc. 525, 549, 551;1989, c. 736; 1990, c. 782; 1992, c. 584; 1994, c. 476; 1997, c. 801; 1999,cc. 772, 975; 2003, cc. 30, 42, 253.)
§ 64.1-57. Incorporation by reference of certain powers of fiduciaries intowill or trust instrument.
(1) The following powers, in addition to all other powers granted by law, maybe incorporated in whole or in part in any will or trust instrument byreference to this section:
(a) To keep and retain any or all investments and property, real, personal ormixed, including stock in the fiduciary institution, if the same be acorporation, as they may be at the time they come into the custody of saidfiduciary, regardless of the character of same or whether they are such asthen would be authorized by law for investment by fiduciaries or whether adisproportionately large part of the trust or estate remains invested in oneor more types of property, for such time as the fiduciary shall deem best,and to dispose of such property by sale, exchange, or otherwise as and whensuch fiduciary shall deem advisable.
(a1) At the discretion of the fiduciary, to receive additions to the estatefrom any source, in cash or in kind, and to hold, administer and distributesuch additions as a part of and under the same terms and conditions as theestate then currently held.
(b) To sell, assign, exchange, transfer and convey or otherwise dispose of,any or all of the investments and property, either real, personal or mixed,which may be included in, or may at any time become part of the trust orestate upon such terms and conditions as the fiduciary, in his absolutediscretion, may deem advisable, at either public or private sale, either forcash or deferred payments or other consideration, as such fiduciary maydetermine; and for the purpose of selling, assigning, exchanging,transferring or conveying the same, to make, execute, acknowledge and deliverany and all instruments of conveyance, deeds of trust, or assignments in suchform and with warranties and covenants as such fiduciary may deem expedientand proper; and in the event of any sale, conveyance, exchange, or otherdisposition of any of the trust or estate, the purchaser shall not beobligated in any way to see to the application of the purchase money or otherconsideration passing in connection therewith.
(b1) To grant, sell, transfer, exchange, purchase or acquire options of anykind on property held by such trust or estate or acquired or to be acquiredby such trust or estate or held or owned by any other person.
(c), (c1) [Repealed.]
(d) To lease any or all of the real estate, which may be included in or atany time become a part of the trust or estate, upon such terms and conditionsas said fiduciary, in his sole judgment and discretion, may deem advisable,and any lease or leases made by such fiduciary may extend beyond the term ofthe trust or administration of the estate and for the purpose of leasing saidreal estate, to make, execute, acknowledge and deliver any and allinstruments, in such form and with such covenants and warranties as suchfiduciary may deem expedient and proper.
(e) To vote any stocks, bonds, or other securities held by such fiduciary atany meeting of stockholders, bondholders, or other security holders, and todelegate the power to so vote to attorneys-in-fact or proxies under power ofattorney, restricted or unrestricted.
(f) To borrow money for such periods of time and upon such terms andconditions as to rates, maturities, renewals and security as to suchfiduciary shall seem advisable, including the power to borrow from thefiduciary, if the fiduciary be a bank, for the purpose of paying debts, taxesor other charges against the trust or estate or any part thereof, and withprior approval of the court for any proper purpose of the trust or estate,and to mortgage or pledge such portion of the trust or estate as may berequired to secure such loan or loans; and as maker or endorser to renewexisting loans.
(f1) To make loans or advancements to the executor or other representative ofthe grantor's estate in case such executor or other representative is in needof cash with which to pay taxes, claims or other indebtedness of thegrantor's estate; but no assets acquired from a qualified retirement benefitplan under § 2039 (c) of the Internal Revenue Code shall be so used, and suchassets shall be segregated and held separately until all claims against theestate for debts of the decedent or claims of administration have beensatisfied. Such loans or advancements may be secured or unsecured, and thetrustee shall not be liable in any way for any loss resulting to the trust orestate by reason of the exercise of this authority.
(g) To compromise, adjust, arbitrate, sue on or defend, abandon, or otherwisedeal with and settle claims, in favor of or against the trust or estate asthe fiduciary shall deem best, and his decision shall be conclusive.
(h) To make distributions in cash or in kind or partly in each at valuationsto be determined by the fiduciary, whose decision as to values shall beconclusive.
(i), (i1) [Repealed.]
(j) To repair, alter, improve, renovate, reconstruct and demolish any of thebuildings on the real estate held by such fiduciary and to construct suchbuildings and improvements thereon as such fiduciary may, in his discretion,deem advisable.
(k) To employ and compensate, out of the principal or the income or both asto the fiduciary shall seem proper, agents, accountants, brokers,attorneys-in-fact, attorneys-at-law, tax specialists, licensed real estatebrokers, licensed salesmen and other assistants and advisors deemed by thefiduciary needful for the proper administration of the trust or estate, andto do so without liability for any neglect, omission, misconduct, or defaultof any such agent or professional representative provided he was selected andretained with reasonable care.
(l) To rely upon any affidavit, certificate, letter, notice, telegram, orother paper or upon any telephone conversation believed by such fiduciary tobe genuine and upon any other evidence believed by such fiduciary to besufficient, and to be protected and saved harmless in all payments ordistributions required to be made hereunder if made in good faith and withoutactual notice or knowledge of the changed condition or status of any personreceiving payments or other distributions upon a condition.
(m) To retain any interest held by such fiduciary in any business, whether asa stockholder or security holder of a corporation, a partner, a soleproprietor, or otherwise, for any length of time, without limitations, solelyat the risk of the trust or estate and without liability on the part of thefiduciary for any losses resulting therefrom; to participate in the conductof such business and take or delegate to others discretionary power to takeany action with respect to its management and affairs which an individualcould take as the owner of such business, including the voting of stock, andthe determination of any or all questions of policy; to participate in anyincorporation, reorganization, merger, consolidation, recapitalization orliquidation thereof; to invest additional capital in, subscribe to additionalstock or securities of, and loan money or credit with or without security to,such business out of the trust or estate property; to elect or employ asdirectors, officers, employees or agents of such business, and compensate,any persons, including the fiduciary or a director, officer, or agent of thefiduciary; to accept as correct financial or other statements rendered by thebusiness from time to time as to his conditions and operations except whenhaving actual notice to the contrary; to regard the business as an entityseparate from the trust or estate with no duty to account to any court as tohis operations; to deal with and act for the business in any capacity,including any banking or trust capacity and the loaning of money out of thefiduciary's own funds, and to be compensated therefor; and to sell orliquidate such interest or any part thereof at any time. If any businessshall be unincorporated, contractual and tort liabilities arising out of suchbusiness shall be satisfied, first, out of the business, and second, out ofthe trust or estate; but it is intended that in no event shall there be aliability of the fiduciary, and if the fiduciary shall be held liable, suchfiduciary shall be entitled to indemnification from the business and thetrust or estate in the order named. Such fiduciary shall be entitled to suchadditional compensation as is commensurate with the time, effort, andresponsibility involved in his performance of services with respect to suchbusiness. Such compensation for services rendered to the business may be paidby such fiduciary from the business or from other assets or from both as thefiduciary, in his discretion, may determine to be advisable; the amount ofsuch additional compensation, however, shall be subject to the final approvalof the court.
(n) To do all other acts and things not inconsistent with the provisions ofthe will or trust in which these powers are incorporated which such fiduciarymay deem necessary or desirable for the proper management of the trustsherein created, in the same manner and to the same extent as an individualmight or could do with respect to his own property.
(o) To hold property in his name or in the name of nominees.
(p) During the minority, incapacity or the disability of any beneficiary, thefiduciary may, in his sole discretion, distribute income and principal tosuch beneficiary in any one of the following ways: (1) directly to saidbeneficiary; (2) to a relative, friend, guardian, conservator or committee,to be expended by such person for the education, maintenance, support orbenefit of said beneficiary; (3) by himself expending the same for theeducation, maintenance, support or benefit of said beneficiary; (4) to anadult person or bank authorized to exercise trust powers as custodian for aminor beneficiary under the Uniform Transfers to Minors Act (§ 31-37 et seq.)to be held by such custodian under the terms of such act; or (5) to an adultperson or bank authorized to exercise trust powers as custodial trustee for abeneficiary who is incapacitated as defined in § 55-34.1, under the UniformCustodial Trust Act (§ 55-34.1 et seq.) to be held as custodial trustee underthe terms of such act.
(q) To continue and carry on any farming operation transferred to him and tooperate such farms and any other farm which may be acquired and, in so doing,by way of illustration and not in limitation of his powers, to operate thefarm with hired labor, tenants or sharecroppers; to hire a farm manager or aprofessional farm management service to supervise the farming operations; tolease or rent the farm for cash or for a share of the crops; to purchase orotherwise acquire farm machinery and equipment and livestock; to construct,repair and improve farm buildings of all sorts needed, in its judgment, forthe operation of the farm; to make loans or advances or to obtain such fromany source, including the fiduciary at the prevailing rate or rates ofinterest for farm purposes such as for production, harvesting, or marketing,or for the construction, repair, or improvement of farm buildings or for thepurchase of farm machinery or equipment or livestock; to employ approved soilconservation practices in order to conserve, improve and maintain thefertility and productivity of the soil; to protect, manage and improve thetimber and forest on the farm and sell the timber and forest products when itis to the best interest of the estate or trust; to ditch and drain damp orwet fields and areas of the farm when and where needed; to engage inlivestock production, if it is deemed advisable, and to construct such fencesand buildings and plant such pastures and crops as may be necessary to carryon such a livestock program; to execute contracts, notes and chattelmortgages relating to agriculture with the Commodity Credit Corporation, theUnited States Secretary of Agriculture or any other officer or agency of thefederal or state governments, to enter into acreage reduction agreements, tomake soil conservation commitments, and to do all acts necessary to cooperatewith any governmental agricultural program; and in general, to employ themethods of carrying on the farming operation that are in common use by thecommunity in which the farm is located, inasmuch as the duties the fiduciaryis requested to assume with respect to farming operations may considerablyenlarge and increase his usual responsibility and work as fiduciary, it isagreed that the fiduciary shall be entitled to such additional reasonablecompensation as is commensurate with the time, effort and responsibilityinvolved in his performance of such services.
(r) To purchase and hold policies of life insurance on the life of anybeneficiary, or any person in whom the beneficiary has an insurable interest,and pay the premiums thereon out of income or principal as he deemsappropriate; provided, however, that the decision of the beneficiary of anytrust otherwise meeting the requirements of § 2056 (b) (5) of the InternalRevenue Code of 1954, as amended, shall control in respect to the purchase orholding of a policy of life insurance by the trustee of such trust.
(s) To make any election authorized under any law requiring, or relating tothe requirement for, payment of any taxes or assessments on assets or incomeof the estate or in connection with any fiduciary capacity, regardless ofwhether any property or income is received by or is under the control of thefiduciary, including, but not limited to, elections concerning the timing ofpayment of any such tax or assessment, the valuation of any property subjectto any such tax or assessment, the alternative use of items of deduction incomputing any tax or assessment and including specifically electionspermitted by statutes enacted after the date of execution of the will ortrust instrument.
(t) To comply with environmental law:
1. To inspect property held by the fiduciary, including interests in soleproprietorships, partnerships, or corporations and any assets owned by anysuch business enterprise, for the purpose of determining compliance withenvironmental law affecting such property and to respond to a change in, orany actual or threatened violation of, any environmental law affectingproperty held by the fiduciary;
2. To take, on behalf of the estate or trust, any action necessary to respondto a change in, or prevent, abate, or otherwise remedy any actual orthreatened violation of, any environmental law affecting property held by thefiduciary, either before or after the initiation of an enforcement action byany governmental body;
3. To refuse to accept property in trust if the fiduciary determines that anyproperty to be transferred to the trust either is contaminated by anyhazardous substance or is being used or has been used for any activitydirectly or indirectly involving any hazardous substance which could resultin liability to the trust or otherwise impair the value of the assets heldtherein;
4. To disclaim any power granted by any document, statute, or rule of lawwhich, in the sole discretion of the fiduciary, may cause the fiduciary toincur personal liability under any environmental law;
5. To charge the cost of any inspection, review, abatement, response, cleanupor remedial action authorized herein against the income or principal of thetrust or estate;
6. For purposes of this subdivision, "environmental law" means any federal,state, or local law, rule, regulation, or ordinance relating to protection ofthe environment or human health and "hazardous substances" means anysubstances defined as hazardous or toxic or otherwise regulated by anyenvironmental law.
(u) To resign as a fiduciary if the fiduciary reasonably believes that thereis or may be a conflict of interest between it in its fiduciary capacity andin its individual capacity because of potential claims or liabilities whichmay be asserted against it on behalf of the trust or estate because of thetype or condition of assets held therein.
(2) As used in the section, the term "fiduciary" shall mean and include oneor more individuals or corporations having trust powers and the use of themale gender shall include the female; and any substitute, added or successorfiduciary shall have all of the powers hereby provided for the fiduciarynamed in the will or trust instrument. The provisions of this section may byreference hereto be made applicable to a fiduciary of the estate of adecedent as well as to the trustee of an inter vivos or testamentary trust.
(3) For the purposes of this section, unless the will or trust instrumentexpresses a contrary intention, the incorporation by reference of powersenumerated by this statute shall refer to those powers existing at the timeof death and reference to powers under the Uniform Gifts to Minors Act in aninstrument executed prior to July 1, 1989, shall be construed to refer to theUniform Transfers to Minors Act (§ 31-37 et seq.).
(4) This section is not intended and shall not be construed to affect theapplication of the standard of judgment and care as set forth in Article 2 (§26-45.3 et seq.) of Chapter 3 of Title 26.
(5) In the event that the will or trust instrument shall contain a provisionin favor of a surviving spouse of the testator or grantor, the powers aboveenumerated shall in no way be construed or interpreted in any fashion whichmight cause the bequest to fail to qualify for the marital deductionpermitted under the federal estate tax law, unless the will or trustinstrument shall specifically provide to the contrary. A fiduciary actingunder a construction or interpretation of a power, which action is otherwisereasonable under the circumstances, shall incur no responsibility for actstaken in good faith which are otherwise thereafter contended to be in afashion which might cause disqualification for the marital deduction. Theprovision of this subsection shall apply without regard to the time the willor trust was executed or probated or the testator died in relation to theeffective date of this section or amendments thereto.
(6) For the purposes of this section, the term "estate" shall include allinterests in the real or personal property of a decedent passing by will orby intestacy. This subsection is declarative of existing law.
(Code 1950, § 64-57.2; 1966, c. 425; 1968, c. 656; 1970, cc. 65, 296; 1972,c. 788; 1973, c. 94; 1974, c. 659; 1976, c. 419; 1982, cc. 525, 549, 551;1989, c. 736; 1990, c. 782; 1992, c. 584; 1994, c. 476; 1997, c. 801; 1999,cc. 772, 975; 2003, cc. 30, 42, 253.)
