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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

204

:
POWERS OF FINANCIAL INSTITUTIONS






Subchapter

002
:
DEPOSITS IN GENERAL










 

§

14212. Joint fiduciary accounts

(a) Statement of

purpose. The purpose of this section is to create a new form of joint financial

account whereby the account owner designates a fiduciary with authority to use

monies in the account for the benefit and under the direction of the account

owner, and to enable the account owner as well as law enforcement to enforce

the terms of the declaration of intent.

(b) A

"joint fiduciary account" is created by a deposit in a financial

institution in the name of an owner naming a fiduciary or several fiduciaries

when the owner has received a disclosure statement and executed a declaration

of intent as provided in this section. An "owner" may be one or more

joint owners of the account. Only the owner may designate a fiduciary at the

time an account is opened, or may substitute or remove a fiduciary. A fiduciary

shall act only in accordance with the declaration of intent and shall have

authority to take all actions permitted by the terms and conditions of the

account that are consistent with the declaration of intent.

(c) The

declaration of intent shall include: date of execution; name and signature of

owner; name and signature of fiduciary; any limitations on the power of the

fiduciary to distribute or expend the funds; whether the fiduciary is to be

paid and, if so, how much and on what basis; name and signature of two or more

witnesses, neither of whom shall, at the time of execution, be the fiduciary

and who attest to the sound mind and lack of duress on the owner; acknowledgment

of receipt by the fiduciary of a copy of the declaration; and notice to the

fiduciary that a withdrawal or expenditure of the funds in the joint fiduciary

account which is not in accordance with the declaration of intent may result in

criminal or civil liability. The financial institution that is to hold the

joint fiduciary account shall provide its name and address and the number of

the account.

(d) A disclosure

statement must accompany a declaration of intent. The disclosure statement and

declaration of intent shall be in no less than 10-point type and in

substantially the following form:

(1)  Disclosure Statement:  INFORMATION CONCERNING JOINT FIDUCIARY

ACCOUNTS A joint fiduciary account allows you to give direction on how you

would like your money to be spent, at the same time as it allows you to give

another person (or persons) authority to withdraw money or write checks on your

account. If you open a joint fiduciary account, you are considered the

"owner"  of the account. The

person or persons you authorize to access the account are  called a "fiduciary." The fiduciary

shall handle your money in a way that is beneficial to you and to act according

to your instructions. You, as the owner, always have the right to withdraw

money from or to write checks on the account. One way to understand the

advantages of a joint fiduciary account is to compare it to alternative forms

of accounts. A regular joint account is an account in two or more names. Both

people have the same authority to take and use the money. Thus, even if the

money really belongs to one of the account holders, and the intent was that it

would be used for that person, nothing can 

be done to stop the other account holder from taking and using all the

money for other purposes. A sole account with multiple authorized signatures

provides a little more protection than a regular joint account. At least it is

clear with this account that the money really belongs to the person whose name

is on the account, and does not belong to those who are only authorized to

sign. (There are often tax reasons for a person to have a sole account with

multiple authorized signatures rather than a joint account.) Nevertheless,

nothing can be done to stop a person who is authorized to sign on the account

from taking and using all the money for some purpose other than for the person

whose money  it is. A joint fiduciary

account provides more protection for the owner than either of the other

accounts because the owner makes a clear statement about how the money can be

used, and the fiduciary has to follow those instructions or be subject to civil

or criminal liability, or both. The fiduciary is also legally  required to keep track of how the money is

spent so the owner or another authorized person can verify that the money was

used according to the instructions. How do you want your money to be spent? If

you open a joint fiduciary account, you decide how you want your money to be

spent. This statement should be broad enough to include everything you need  and want, but not so broad as to go too far

beyond that. Thus, you might want  to

instruct the fiduciary to spend your money on "all my basic living

expenses and, if any money is left over, on gifts to my children and grandchildren,

but not to exceed five percent of deposits per year." What is included in

the instructions to the fiduciary is completely up to you. If you want to pay

your fiduciary for the services provided, or if you want your fiduciary to be

able to make gifts to himself or herself or others, you must explicitly

indicate that in your declaration of intent. Do you want special instructions

on accountings? If you give no special instructions on accountings, the

fiduciary must just keep track of how the money is spent and provide that

information to you, your  legal

representative, a state agency or a court, but only if asked to do so. You

might want to instruct your fiduciary to give a periodic accounting to you  or to someone else. Thus, your instructions

could include: "Give a copy of an 

accounting of your use of this account to me and to my attorney or my

daughter] every January." If you want more than one fiduciary, what do you

want their relationship to be? For some account owners, it is useful to name

more than one fiduciary. For example, you might want your daughter to be the

primary fiduciary, but your nephew to be the fiduciary when she goes to Florida

every winter. You can name  more than one

fiduciary, but it is useful for you to give them instructions on when you want

each to act. Those instructions dictate how they should act. However, the

financial institution holding the account is under no obligation to make sure

the fiduciaries act in accordance with your instructions; it will  still accept either signature as valid for

taking money out of the account. Are you trying to make sure your fiduciary

takes certain actions, or just trying to give your fiduciary authority to act?

Sometimes an account owner wants to use the account to make sure the

fiduciary  takes certain actions, such as

paying the utility bills or paying the mortgage. The joint fiduciary account

cannot guarantee for you that the fiduciary will act as you hope. The account

simply authorizes the fiduciary to  act,

but does not oblige the fiduciary to act. The same is true for a regular  joint account, as well as a sole account with

multiple authorized signatures. For any of these accounts, if you want to make

sure certain bills are paid, you and your creditor may agree to have the

creditor automatically debit your account on a specific day of the month for

the amount of your bill. Have you already given or do you want to give someone

authority to make decisions for you beyond using the money in an account?

Creating a joint fiduciary account will only give the fiduciary authority to

act on your behalf with regard to the monies held in the account. It can be

combined with a power of attorney or a durable power of attorney (one that

lasts even if you are no longer able to make decisions for yourself). You can

name the same person to be your fiduciary on a joint fiduciary account and your

agent under a power of attorney, or you can name different people for each. In

either event, it is useful to think through who should be named in each

document and the relationship between them if you are going to name different

people. If you have an attorney preparing a power of attorney, consider

consulting with the attorney when opening a joint fiduciary account. THE JOINT

FIDUCIARY ACCOUNT WILL NOT BE VALID UNLESS A DECLARATION OF INTENT IS SIGNED BY

YOU IN THE PRESENCE OF TWO OR MORE WITNESSES WHO ARE NOT A NAMED FIDUCIARY, AND

IS ALSO SIGNED BY THE FIDUCIARY. (2) Declaration of Intent: DECLARATION OF

INTENT FOR JOINT FIDUCIARY ACCOUNT OWNER OF ACCOUNT I/We

________________________, hereby open a Joint Fiduciary Account. Following are

my instructions to the fiduciary for how monies which are deposited into this

joint fiduciary account shall be used:

__________________

__________________ (Attach additional

pages as necessary) I/We hereby appoint __________________ of

__________________ (town of residence) and ____________ of ____________ (town

of residence) to be the fiduciary(ies) on the account, and acknowledge that

I/we have received a copy of "Information Concerning Joint Fiduciary

Accounts". Dated at _____________ , this ______ day of ________, 20____ .

__________________ Signature of Owner of Account Dated at _____________ , this

______ day of ________, 20____ . __________________ Signature of Owner of

Account WITNESSES I declare that the owner(s) appear(s) to be of sound mind and

free from duress  at the time of signing

this Declaration of Intent for a joint fiduciary account, and that the owner(s)

affirmed that he and/or she is (are) aware of the nature of the document and is

(are) signing it freely and voluntarily. I further declare that I am not a

person named as a fiduciary. ____________________________________ Witness

Signature ______________ Dated: ____________ Witness Address ______________

Witness (Print Name) _____________ ____________________________________ Witness

Signature ______________ Dated: ____________ Witness Address ______________

Witness (Print Name) _____________ FIDUCIARIES (Only one is required.) I

declare that I am willing to act as the fiduciary on the Joint Fiduciary

Account of __________________ (owner(s)). I have read the Declaration of Intent

and agree to use the money in the account only for the purposes stated therein.

I further agree to maintain accurate records of my use of any monies in the

account and to produce them upon request by the owner, by a legal

representative of the owner, by a state agency, or by a court. I understand

that my authority to act ceases when an owner changes the fiduciary, closes the

account, or the last owner has died. I further acknowledge that I may be sued

civilly if I intentionally or negligently fail to abide by the terms of the

Declaration of Intent, or may be charged criminally if I intentionally fail to

abide by its terms, or both. I acknowledge that I have received a copy  of the Declaration of Intent.

________________________ Fiduciary (Print Name)

__________________ Fiduciary Address

____________________________________ Date __________________ Fiduciary

Signature If more than one: ________________________ Fiduciary (Print Name)

__________________ Fiduciary Address

____________________________________ Date __________________ Fiduciary

Signature For Financial Institution Use Only: Financial Institution Name:

________ Account Number: __________________ Address: __________________

(3) The Commissioner

shall have the authority to adopt rules amending the disclosure statement and

declaration of intent to reflect changes necessitated by a change in law or to

make minor changes to the forms in this subsection.

(e) The

fiduciary shall maintain accurate records to permit an accounting of the acts

of the fiduciary, and shall provide such records and accounting if requested to

do so by the owner, by a legal representative of the owner, by the Attorney

General, a State's Attorney, or the Department of Disabilities, Aging, and

Independent Living if any has reason to believe the fiduciary is in violation

of this section, or by a court of competent jurisdiction.

(f) All rights,

title, interest, and claim to a joint fiduciary account, and any additions or

accumulations thereto, shall be the property of the owner of the account. An

owner shall have authority to take all actions permitted by the terms and

conditions of the account. The designation of a fiduciary shall not affect the

title to funds in the account, and the owner shall not be considered to have

made a gift to the fiduciary of all or any portion of the funds in the joint

fiduciary account, or to any additions or accumulations thereto. The fiduciary

shall have no right of survivorship in the account unless such right is

specifically provided for in the account title.

(g) The

financial institution holding a joint fiduciary account shall retain a signed

copy of the declaration of intent according to the financial institution's

records retention policy. Notwithstanding any provision of law to the contrary,

no financial institution shall be responsible for monitoring transactions to or

from any joint fiduciary account. A financial institution shall not be liable

for withdrawals and payments made by the fiduciary unless an owner has notified

the financial institution, in accordance with the terms and conditions of the

account, to change the fiduciary, or has closed the account, or the financial

institution has been notified that the last owner is deceased.

(h) Any owner

who sustains damages or injury as a result of a fiduciary's action or inaction

in violation of this section or the declaration of intent may sue the fiduciary

for appropriate equitable relief, and may sue and recover from the fiduciary

the amount of his or her damages, reasonable attorney's fees, and exemplary

damages not exceeding three times the owner's damages. Nothing in this section

shall be construed to abrogate any other causes of action or relief at law or

equity to which the owner is entitled under other laws or at common law.

(i) Whenever the

Attorney General or a State's Attorney has reason to believe that a fiduciary

has used or is about to use the proceeds in a joint fiduciary account in

violation of the declaration of intent, the Attorney General or a State's

Attorney may bring an action in the name of the State against such person to

restrain by temporary or permanent injunction the use of funds from the

account. The action may be brought in the Superior Court of the county in which

the joint fiduciary account is located, where the owner resides, or where the

fiduciary resides, has a place of business, or is doing business. In addition

to the foregoing, the Attorney General or a State's Attorney may request, and

the Court is authorized to render, any other temporary or permanent relief, or

both, as may be in the public interest, including, closing the account,

replacing the fiduciary, ordering restitution of cash to the account, imposing

of a civil penalty of not more than $10,000.00 for each violation, and ordering

reimbursement to the State of Vermont for the reasonable value of its services

and expenses in investigating and prosecuting the action. In addition to the

foregoing, the Attorney General or a State's Attorney may seek relief under 33

V.S.A. chapter 69, subchapter 2 or may charge the fiduciary pursuant to 13

V.SA. § 2028. (Added 2001, No. 115 (Adj. Sess.), § 1; amended 2005, No. 174

(Adj. Sess.), § 13.)