14212. Joint fiduciary accounts
(a) Statement of purpose. The purpose of this section is to create a new form of joint financial account for which 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 that 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 not 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 that 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 in the Declaration. 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 to the account, 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 to the account. 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; 2021, No. 105 (Adj. Sess.), § 296, eff. July 1, 2022.
