Annual Trust Accounting Requirements in Vermont

At a glance

Requirements one by one

Requested recipients are broader than qualified beneficiaries

14A V.S.A. § 813(c) sends annual and termination reports automatically to distributees and permissible distributees. It also sends the report to “other beneficiaries who request it.” That requester does not have to fit the narrower qualified-beneficiary definition.

Upon a vacancy, the former trustee reports to qualified beneficiaries unless a cotrustee remains. Section 103(13) uses first-, second-, and final-tier horizons but excludes certain second- and final-tier interests that remain revocable by a power-of- appointment exercise or eliminable by trust amendment. Section 301 allows notice and consent through authorized representation.

Annual, termination, and vacancy are separate triggers

The recurring report is due at least annually. Trust termination independently triggers the same report. A vacancy independently requires the former trustee's report unless a cotrustee remains.

A personal representative may report for a deceased trustee. A guardian or duly authorized power-of-attorney agent may report for an incapacitated trustee.

The legacy language in § 813(e) names only the acceptance and irrevocability notices in subdivisions (b)(2) and (3). It does not state a pre-effective-date exclusion for the report in subsection (c).

Vermont gives the report a focused financial checklist

The report covers trust property, liabilities, receipts, and disbursements. It states the source and amount of trustee compensation and lists the trust assets, with each asset's market value if feasible.

Section 813(c) does not require a distribution schedule, beginning carrying values, principal-income allocation columns, agent schedules, related-party schedules, a final distribution plan, trustee signature, oath, or notarization as universal report contents.

Delivery focuses on likely receipt

Section 109 requires a method reasonably suitable under the circumstances and likely to result in receipt. It lists first-class mail, commercial delivery service, personal delivery, last-known residence or business delivery, and a properly directed electronic message.

The trustee need not send the report to a person whose identity or location is unknown and not reasonably ascertainable. The ordinary report has no routine court-filing, certified-mail, adult-server, or proof-of-service requirement in the cited statutes.

Trust terms and beneficiary waiver are distinct

Under § 105, trust terms generally prevail unless the statute appears in the mandatory list. Section 813's report duty is not listed, so its annual, termination, vacancy, recipient, and content rules are defaults subject to the trust terms.

A beneficiary may waive reports or other information and withdraw the waiver for future reports and information. Section 109 separately allows the person entitled to a notice or document to waive it.

While a trust is revocable, § 603 makes beneficiary rights subject to the settlor's control and trustee duties exclusive to the settlor. A withdrawal-power holder has the settlor's rights for affected property while the power can be exercised.

Interested persons may approve a report or accounting through a nonjudicial settlement agreement under § 111, subject to the material-purpose and court- approvable-terms limits.

Vermont adds an insufficiency-notice extension

14A V.S.A. § 1005(a) bars a breach proceeding more than one year after the beneficiary or representative was sent a report that adequately disclosed the potential claim. The statute does not require a separate limitations warning to begin that period.

Adequate disclosure means enough information to know or have reason to know of the claim, or that a further inquiry was required and would have disclosed it. If the beneficiary or representative gives the trustee written notice within the one-year period that the report contains insufficient information to decide whether to sue, the deadline extends six months. No proceeding within the extension conclusively establishes adequate disclosure of potential claims.

When the one-year route does not apply, the three-year period runs from the first of the trustee's removal, resignation, or death; termination of the beneficiary's interest; or termination of the trust. The Attorney General's charitable-trust petition follows the separate three-years-after-the-claim-arises rule in subsection (d).

14A V.S.A. § 1009 separately protects a trustee after informed consent, release, or ratification. It does not protect a release induced by trustee misconduct or given without knowledge of the beneficiary's rights or material breach facts.

Probate Division remedies and fees are discretionary

Section 1001 permits the Probate Division to compel duties or an account, enjoin or redress a breach, appoint a special fiduciary, suspend or remove the trustee, reduce or deny compensation, address trust property, or grant other appropriate relief. 14A V.S.A. § 1004 permits costs, expenses, and reasonable attorney fees as justice and equity may require; an award is not automatic.

What trips people up

• A requesting beneficiary need not be qualified. The annual/termination requester phrase is broader than the vacancy-report recipient class.
• “If feasible” modifies market values. The asset list remains required.
• The one-year rule does not require magic notice words. Vermont ties it to adequate disclosure and adds the written-insufficiency extension.
• The legacy exclusion is narrow. It applies to initial notices, not the report subsection.

Common questions

Does every qualified beneficiary automatically receive the annual report?

No. Automatic reports go to distributees and permissible distributees. Another beneficiary receives the report by requesting it.

Can the report be sent electronically?

Yes, if the electronic message is properly directed and the method is reasonably suitable and likely to result in receipt.

How does a beneficiary get the six-month extension?

Within the original one-year period, the beneficiary or representative gives the trustee written notice that the report supplied insufficient information to decide whether to commence a breach action.

Does a vacancy report disappear if another trustee remains?

Yes. Section 813(c) requires the former trustee's vacancy report unless a cotrustee remains in office.

Statutes and sources

• 14A V.S.A. §§ 103, 105, 109, and 111 — recipient definition, trust-term control, delivery, waiver, and nonjudicial report approval. Vermont General Assembly (current official chapter accessed 2026-08-10; 2026 acts checked).
• 14A V.S.A. §§ 301, 603, and 813 — representation, settlor and withdrawal-power overlays, recipients, triggers, contents, values, waiver, legacy language, and charitable notice. Representation, powers, and reporting (accessed 2026-08-10; 2026 acts checked).
• 14A V.S.A. §§ 1001, 1004, 1005, and 1009 — remedies, costs and fees, one-year and three-year periods, six-month extension, charitable exception, and consent or release limits. Vermont General Assembly (accessed 2026-08-10; 2026 acts checked).