Virginia Land Trust Agreement (Title-Holding Trust)

VIRGINIA LAND TRUST AGREEMENT

(Title-Holding Trust Under Virginia Uniform Trust Code, Va. Code § 64.2-700 et seq.)

TABLE OF CONTENTS

1. Establishment, Parties, and Trust Property
2. Definitions
3. Nature of Trustee's Estate and Beneficial Interest
4. Trustee Powers, Duties, and Limitations
5. Direction by Beneficiary; Trust Director
6. Beneficial Interest as Personal Property
7. Assignment of Beneficial Interest
8. Successor Beneficiaries
9. Successor Trustees
10. Compensation, Indemnification, and Liability
11. Term and Termination; Rule Against Perpetuities
12. Tax Provisions
13. General Provisions and Governing Law
14. Execution

ARTICLE I. ESTABLISHMENT, PARTIES, AND TRUST PROPERTY

1.1 Caption and Parties

1.2 Trust Name

This trust shall be known as the "[TRUST NAME] Land Trust, dated [__/__/____]" (the "Trust"). Title shall be taken in the name "[TRUSTEE NAME], as Trustee under Trust Agreement dated [__/__/____], known as the [TRUST NAME] Land Trust, and not personally."

1.3 Recitals

• A. The Settlor desires to convey legal title to the Real Estate described in Section 1.4 to the Trustee, to be held by the Trustee pursuant to the Virginia Uniform Trust Code, Va. Code § 64.2-700 et seq., and the terms of this Agreement.
• B. The Settlor intends that the Beneficiary's interest in the Trust shall constitute personal property, exercisable only by direction to the Trustee under Va. Code § 64.2-779 (directed trusts).
• C. The Trustee has agreed to accept the trusteeship and to administer the Trust on the limited, ministerial terms set forth herein.

1.4 Initial Trust Property — Legal Description

The Trustee acknowledges receipt of the following real estate located in [CITY/COUNTY], Virginia (the "Real Estate"):

Common Address: [STREET ADDRESS, CITY, VIRGINIA, ZIP]

Tax Map Parcel No.: [____________________]

Legal Description:

[INSERT FULL METES-AND-BOUNDS OR LOT/BLOCK/SUBDIVISION LEGAL DESCRIPTION EXACTLY AS IT APPEARS ON THE DEED IN TRUST. ATTACH AS EXHIBIT B IF LENGTHY.]

Title is conveyed by Deed in Trust of even date herewith, recorded or to be recorded in the Clerk's Office of the Circuit Court of [CITY/COUNTY], Virginia, Instrument No. [____________________].

1.5 Additional Property

Additional real or personal property may be added to the Trust by the Settlor, Beneficiary, or third party with the Trustee's acceptance. Each addition shall be evidenced by an amendment or supplement to Exhibit B.

ARTICLE II. DEFINITIONS

• "Agreement" means this Land Trust Agreement, with all schedules, exhibits, and amendments.
• "Beneficial Interest" means the entire interest of the Beneficiary, including all rights of management, possession, use, income, proceeds, and disposition of the Real Estate exercised through written direction. It is personal property under Section 6.1 and Va. Code § 64.2-701.
• "Beneficiary" means the person(s) listed on Exhibit A and any successor or assignee.
• "Trust Director" has the meaning given in Va. Code § 64.2-779 and means the person(s) authorized to direct the Trustee under Article V. If no separate Trust Director is named, the Beneficiary is the Trust Director.
• "UTC" or "Virginia UTC" means the Virginia Uniform Trust Code, Va. Code § 64.2-700 et seq., as amended.
• "Real Estate" means the real property described in Section 1.4 and any additions accepted by the Trustee.

ARTICLE III. NATURE OF TRUSTEE'S ESTATE AND BENEFICIAL INTEREST

3.1 Legal Title in Trustee

The Trustee shall hold full legal title to the Real Estate. Record title shall stand in the Trustee's fiduciary name, not in the name of the Beneficiary or Settlor. No person dealing with the Trustee shall be required to inquire into the existence, validity, or scope of any direction or into the application of proceeds, in accordance with Va. Code § 64.2-803.

3.2 Beneficial Interest Is Personal Property

The interest of the Beneficiary in the Trust and the Real Estate is and shall be personal property for all purposes. The Beneficiary has no legal or equitable estate in the Real Estate as real estate. The Beneficiary's sole rights are in the earnings, avails, and proceeds of the Real Estate and the right to direct the Trustee to deal with the Real Estate under Article V. This characterization is intended for state-law purposes including succession, marital property, characterization for state filing fees and taxes (subject to applicable law), and creditor's rights, to the extent permitted by Virginia law.

3.3 No Partition

No Beneficiary, successor, assignee, judgment creditor, or other claimant shall be entitled to partition of the Real Estate or to compel in-kind distribution. Rights of distribution are limited to proceeds in money or in kind only upon termination as provided herein.

ARTICLE IV. TRUSTEE POWERS, DUTIES, AND LIMITATIONS

4.1 Direction-Only Trustee

This Trust is a directed trust under Va. Code § 64.2-779. The Trustee shall have no duty or power to manage, control, deal with, or dispose of the Real Estate except upon the written direction of the Beneficiary or Trust Director. The Trustee shall not be required to investigate or take any action with respect to the Real Estate absent such direction.

4.2 Specific Powers Upon Direction

Upon written direction of the Beneficiary or Trust Director, the Trustee may (cf. Va. Code §§ 64.2-776 and 64.2-777):

• ☐ Sell, exchange, convey, or transfer the Real Estate (or any portion or interest);
• ☐ Mortgage, deed-in-trust, pledge, or otherwise encumber the Real Estate;
• ☐ Lease the Real Estate for any term;
• ☐ Grant easements, licenses, rights-of-way, and restrictive covenants;
• ☐ Subdivide, plat, partition, or dedicate the Real Estate;
• ☐ Borrow money, execute notes, and grant security interests;
• ☐ Receive, hold, invest, and distribute proceeds as directed;
• ☐ Execute deeds, releases, satisfactions, and any other instruments necessary;
• ☐ Defend, prosecute, compromise, or settle claims affecting title (subject to Trustee's protection under Section 4.5).

4.3 No Management Duty

The Trustee has no duty to (a) manage, operate, repair, maintain, or insure the Real Estate; (b) collect rents, profits, or proceeds (unless directed); (c) pay taxes, assessments, utilities, insurance premiums, or HOA charges; (d) investigate, abate, or remediate any environmental or hazardous-material condition; or (e) monitor any law, ordinance, lease, or contract. The Beneficiary shall directly bear all such obligations and shall indemnify the Trustee under Section 10.3.

4.4 Protection of Third Parties

In accordance with Va. Code § 64.2-803, any third party dealing with the Trustee in good faith and for value, without actual knowledge that the Trustee is exceeding or improperly exercising the Trustee's authority, is fully protected and is not required to inquire into the application of proceeds. The Trustee may furnish a Certification of Trust under Va. Code § 64.2-804 in lieu of furnishing this Agreement.

4.5 No Personal Liability of Trustee

The Trustee shall not be personally liable on any contract, lease, mortgage, deed of trust, note, or obligation of the Trust. Every instrument shall recite that it is executed by the Trustee solely in fiduciary capacity and not personally. No recourse shall lie against the Trustee individually for any obligation arising out of or relating to the Real Estate.

4.6 Standard of Care Limited to Direction Function

The Trustee's duties under Va. Code §§ 64.2-763 and 64.2-764 (duty to administer; duty of loyalty) are limited to (i) executing the direction function, (ii) maintaining records, and (iii) holding and conveying legal title. The Trustee owes no duty to monitor or evaluate the prudence of any direction given by the Beneficiary or Trust Director under § 64.2-779(F) (limited fiduciary liability of a directed trustee).

ARTICLE V. DIRECTION BY BENEFICIARY; TRUST DIRECTOR

5.1 Direction Procedure

All directions shall be:

• ☐ In writing, signed by the Beneficiary or Trust Director;
• ☐ Delivered to the Trustee at the address in Section 1.1;
• ☐ Sufficiently specific to identify the action directed; and
• ☐ Accompanied by all documents and funds necessary.

The Trustee may rely on any direction reasonably believed to be genuine without further inquiry.

5.2 Multiple Beneficiaries

If there is more than one Beneficiary, directions must be signed by holders of at least [majority/all/_____ percent] of the Beneficial Interest. The Trustee may follow majority direction, await unanimous direction, or petition the Circuit Court for instructions under Va. Code § 64.2-712.

5.3 Designation of Trust Director

The Beneficiary may designate or remove a Trust Director by signed written instrument delivered to the Trustee. The Trust Director's powers are limited to those specified in this Agreement; the Trust Director is a fiduciary as to the Beneficiary under Va. Code § 64.2-779(D) unless that section otherwise provides.

5.4 Trustee's Refusal to Act

The Trustee may refuse to act on direction that:

• a. Appears unlawful, fraudulent, or in willful breach of trust (§ 64.2-779(F)(2));
• b. Would expose the Trustee to personal liability not adequately indemnified;
• c. Requires the Trustee to take possession of, operate, or manage the Real Estate;
• d. Lacks accompanying funds or required documentation; or
• e. Conflicts with a prior, unrevoked direction.

The Trustee may petition the Circuit Court for instructions under Va. Code § 64.2-712.

ARTICLE VI. BENEFICIAL INTEREST AS PERSONAL PROPERTY

6.1 Characterization

The Beneficial Interest is personal property and shall be treated as such for all purposes under Virginia law to the maximum extent permitted, including succession, marital characterization, recordation tax characterization (subject to applicable Code provisions in Title 58.1), and creditor's rights.

6.2 No Real Estate Rights

No Beneficiary, by virtue of holding the Beneficial Interest, holds (a) any legal or equitable estate in the Real Estate, (b) any right to a deed, conveyance, or partition of the Real Estate, or (c) any right of possession except through direction.

6.3 Creditor Limitations

The Beneficial Interest is subject to creditor claims as personal property of the Beneficiary, subject to:

• a. Any spendthrift provision in Section 6.4;
• b. Va. Code § 64.2-742 (spendthrift provision); and
• c. Va. Code § 64.2-743 (creditor exceptions notwithstanding spendthrift).

6.4 Optional Spendthrift Provision

☐ Spendthrift provision applies: Pursuant to Va. Code § 64.2-742, no Beneficiary shall have power to assign, anticipate, encumber, or otherwise transfer the Beneficial Interest, voluntarily or involuntarily, and the Beneficial Interest shall not be subject to claims of creditors, except as provided in Va. Code § 64.2-743 (exceptions for child/spousal support, judgment creditors providing services to protect the Beneficial Interest, and state/federal claims).

☐ No spendthrift provision; Beneficial Interest is freely assignable.

ARTICLE VII. ASSIGNMENT OF BENEFICIAL INTEREST

7.1 Method

Subject to Article VI, the Beneficial Interest may be assigned by written assignment in substantially the form attached as Exhibit C, signed by the assignor and lodged with the Trustee. No assignment is effective against the Trustee until lodged and accepted in writing.

7.2 Trustee Acceptance

The Trustee may decline an assignment that (a) is not in proper form, (b) violates a spendthrift provision, (c) would result in beneficial ownership by a sanctioned person, or (d) lacks required certifications (W-9, OFAC).

7.3 Effect

Upon acceptance, the assignee is substituted as Beneficiary for the assigned portion, and the Trustee shall amend Exhibit A.

ARTICLE VIII. SUCCESSOR BENEFICIARIES

8.1 Designation

Upon the death of a Beneficiary, the Beneficial Interest shall pass to the Successor Beneficiary(ies) designated on Exhibit A, without probate, upon delivery to the Trustee of:

• ☐ Certified death certificate;
• ☐ Successor's affidavit and identification; and
• ☐ Tax-identification documentation.

8.2 Multiple Successors

Multiple Successor Beneficiaries hold the assigned shares specified on Exhibit A, or equal shares if unspecified.

8.3 Failure of Designation

If no designated Successor is then living, the Beneficial Interest passes to the deceased Beneficiary's estate.

8.4 Revocation/Modification

A Beneficiary may revoke or modify the Successor designation by written instrument signed and lodged with the Trustee. The most recent valid lodged designation controls.

ARTICLE IX. SUCCESSOR TRUSTEES

9.1 Resignation

Upon thirty (30) days' written notice to the Beneficiary plus a final accounting, the Trustee may resign.

9.2 Removal

Holders of at least [majority/all] of the Beneficial Interest may remove the Trustee for cause or without cause, subject to payment of all accrued fees and expenses (cf. Va. Code § 64.2-759 — removal of trustee).

9.3 Appointment of Successor

A Successor Trustee shall be appointed:

• a. By the Beneficiary (holders of a majority); or
• b. If unfilled within sixty (60) days, by the Circuit Court on petition under Va. Code §§ 64.2-712 and 64.2-758.

9.4 Conveyance to Successor

The predecessor Trustee shall execute and deliver a deed and assignment vesting title and trust property in the Successor Trustee, recorded in the Clerk's Office.

ARTICLE X. COMPENSATION, INDEMNIFICATION, AND LIABILITY

10.1 Trustee Compensation

• ☐ Acceptance fee: $[____________]
• ☐ Annual administration fee: $[____________]
• ☐ Per-transaction fee: $[____________]
• ☐ Hourly rate for extraordinary services: $[____________]
• ☐ Reimbursement of all out-of-pocket expenses

(See Va. Code § 64.2-761 — reasonable compensation.)

10.2 Limited Standard of Care

The Trustee's standard of care is limited to (i) executing direction in good faith, (ii) maintaining records, and (iii) holding and conveying legal title. The Trustee is not liable for the Beneficiary's directions under Va. Code § 64.2-779(F).

10.3 Indemnification by Beneficiary

The Beneficiary shall indemnify, defend, and hold harmless the Trustee from all claims, losses, liabilities, damages, judgments, fines, penalties, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to (a) the Real Estate, (b) any direction given, (c) any failure of the Beneficiary to perform any obligation, or (d) any environmental, tort, or contract claim concerning the Real Estate — except to the extent caused by the Trustee's willful misconduct or gross negligence.

10.4 Trustee Lien

The Trustee shall have a first lien on the Real Estate and the Beneficial Interest for unpaid compensation, expenses, and indemnification claims, enforceable per Va. Code § 64.2-761.

ARTICLE XI. TERM AND TERMINATION; RULE AGAINST PERPETUITIES

11.1 Maximum Duration

This Trust shall continue until the earlier of:

• a. Direction by the Beneficiary to terminate and convey out;
• b. The stated termination date in Section 11.2; or
• c. The latest date permitted under Va. Code § 55.1-124 (Uniform Statutory Rule Against Perpetuities), as follows:
• i. As to nonvested interests in the Real Estate (real property held in trust), 90 years after creation or 21 years after the death of the survivor of measuring lives in being at creation, whichever applies under § 55.1-124(A);
• ii. As to nonvested interests in personal property held in trust (including the Beneficial Interest itself if created on or after July 1, 2024), 1,000 years under § 55.1-124(F).

11.2 Stated Termination Date

This Trust shall terminate on [__/__/____], unless previously terminated under Section 11.1.

11.3 Termination Procedure

On termination, the Trustee shall:

• a. Convey the Real Estate to the Beneficiary (or as directed) by recordable deed;
• b. Distribute remaining trust property to the Beneficiary;
• c. Reserve for unpaid trustee compensation, expenses, indemnification, and known liabilities; and
• d. Render a final accounting under Va. Code § 64.2-775.

11.4 No Direction at Termination

If no direction is received within sixty (60) days of the Perpetuities Date or stated termination date, the Trustee may convey the Real Estate to the Beneficiary in kind or petition the Circuit Court for instructions under Va. Code § 64.2-712.

ARTICLE XII. TAX PROVISIONS

12.1 Grantor Trust Status

For federal and Virginia income tax purposes, this Trust is intended to be treated as a [grantor trust as to the Settlor/grantor trust as to the Beneficiary/non-grantor trust].

12.2 Real Estate Taxes

The Beneficiary shall pay all ad valorem real estate taxes, special assessments, and stormwater/utility fees. The Trustee shall forward tax bills but shall not pay them absent direction and funds.

12.3 Recordation Taxes

The Beneficiary shall be responsible for Virginia recordation taxes under Va. Code §§ 58.1-801 et seq. (deed recordation tax) and § 58.1-803 (deed-of-trust tax) at funding, refinancing, and termination. NOTE: Some assignments of beneficial interest may be characterized as transfers of personal property and exempt from recordation tax; this characterization must be reviewed in each transaction.

12.4 TIN

The Trustee shall use [Settlor's TIN (grantor trust) / Trust EIN / Beneficiary's TIN] as appropriate for reporting.

ARTICLE XIII. GENERAL PROVISIONS AND GOVERNING LAW

13.1 Governing Law

Governed by and construed under the laws of the Commonwealth of Virginia, including the Virginia Uniform Trust Code (Va. Code § 64.2-700 et seq.), without regard to conflicts-of-law principles. The parties select Virginia as the principal place of administration (Va. Code § 64.2-721).

13.2 Exclusive Jurisdiction

Exclusive jurisdiction over disputes lies in the Circuit Court of [CITY/COUNTY], Virginia, in accordance with Va. Code § 17.1-513.

13.3 Severability

Invalid provisions shall be reformed to the minimum extent necessary; the remainder continues in effect.

13.4 Amendment

Amendment requires written instrument signed by the Settlor (if living and competent), the Trustee, and all Beneficiaries. After Settlor's death/incapacity, by Trustee and all Beneficiaries.

13.5 Counterparts; Electronic Signatures

May be executed in counterparts. Electronic signatures permitted under the Virginia Uniform Electronic Transactions Act (Va. Code § 59.1-479 et seq.); however, the Deed in Trust and any deed out require original signature and notarial acknowledgment for recording.

13.6 Notices

In writing, delivered by hand, certified mail, or overnight courier to addresses in Section 1.1.

13.7 Headings

For convenience only; not interpretive.

13.8 Entire Agreement

This Agreement with its Schedules and Exhibits constitutes the entire agreement regarding the Trust.

EXECUTION

IN WITNESS WHEREOF, the parties have executed this Virginia Land Trust Agreement as of the date first written above.

Settlor

Trustee (Accepting Trusteeship)

Initial Beneficiary

NOTARIAL ACKNOWLEDGMENT (Settlor)

COMMONWEALTH OF VIRGINIA )
) SS:
CITY/COUNTY OF [____________________] )

The foregoing instrument was acknowledged before me this _____ day of __________________, 20____, by [SETTLOR FULL LEGAL NAME].

_____________________________________
Notary Public

Registration No.: _____________________
My Commission Expires: [__/__/____]

[SEAL]

NOTARIAL ACKNOWLEDGMENT (Trustee)

COMMONWEALTH OF VIRGINIA )
) SS:
CITY/COUNTY OF [____________________] )

The foregoing instrument was acknowledged before me this _____ day of __________________, 20____, by [TRUSTEE FULL LEGAL NAME], as Trustee.

_____________________________________
Notary Public

Registration No.: _____________________
My Commission Expires: [__/__/____]

[SEAL]

NOTARIAL ACKNOWLEDGMENT (Beneficiary)

COMMONWEALTH OF VIRGINIA )
) SS:
CITY/COUNTY OF [____________________] )

The foregoing instrument was acknowledged before me this _____ day of __________________, 20____, by [BENEFICIARY FULL LEGAL NAME].

_____________________________________
Notary Public

Registration No.: _____________________
My Commission Expires: [__/__/____]

[SEAL]

EXHIBIT A — BENEFICIAL INTEREST SCHEDULE

(Beneficial Interest is personal property under Section 6.1 and Va. Code § 64.2-701)

Beneficiary Signature(s):

_____________________________________ Date: [__/__/____]

_____________________________________ Date: [__/__/____]

EXHIBIT B — TRUST PROPERTY SCHEDULE

Full legal descriptions in Schedule B-1.

EXHIBIT C — FORM OF ASSIGNMENT OF BENEFICIAL INTEREST

ASSIGNMENT OF BENEFICIAL INTEREST

For valuable consideration, the receipt of which is acknowledged, [ASSIGNOR NAME] ("Assignor") assigns, transfers, and sets over to [ASSIGNEE NAME] ("Assignee") an undivided [____]% beneficial interest in the [TRUST NAME] Land Trust under Trust Agreement dated [__/__/____], together with all rights, powers, and privileges appurtenant thereto.

The Assignor warrants that (a) Assignor owns the assigned Beneficial Interest, (b) the interest is free of liens (except as disclosed), and (c) no spendthrift or other restriction prohibits this assignment.

Effective on execution and Trustee acceptance.

SOURCES AND REFERENCES

• Virginia Uniform Trust Code, Va. Code § 64.2-700 et seq.:
• § 64.2-701 (Definitions)
• § 64.2-712 (Petition; court oversight)
• § 64.2-721 (Principal place of administration)
• § 64.2-742 (Spendthrift provision)
• § 64.2-743 (Spendthrift exceptions)
• § 64.2-758 (Vacancy in trusteeship)
• § 64.2-759 (Removal of trustee)
• § 64.2-761 (Compensation)
• § 64.2-763 (Duty to administer)
• § 64.2-764 (Duty of loyalty)
• § 64.2-776–777 (Powers of trustee)
• § 64.2-779 (Directed trusts; trust director)
• § 64.2-803 (Protection of third parties)
• § 64.2-804 (Certification of trust)
• Va. Code § 55.1-124 (Uniform Statutory Rule Against Perpetuities; 2024 amendment for 1,000-year personal-property trusts)
• Va. Code § 55.1-300 et seq. (Conveyances)
• Va. Code § 55.1-600 et seq. (Recordation)
• Va. Code § 58.1-801 et seq. (Recordation taxes)
• Va. Code § 17.1-513 (Circuit Court jurisdiction)
• Virginia Law Library — law.lis.virginia.gov