Virginia Enacts Directed Trustee Statute

On April 4, 2012, Virginia Governor McDonnell signed into law Senate Bill 180 which, when incorporated into a trust either by the settlor or the interested parties, provides protections for a trustee when acting or not acting pursuant to the directions of a trust director. The bill amends Virginia Code section 55-548.08, which is the part of the Virginia Uniform Trust Code (VUTC) that addresses the power to direct the action of a trustee.

As estate planning and investments have become more complicated, settlors are increasingly interested in giving third parties – often called "trust directors," "trust protectors" or "trust advisors" – powers to direct the actions of a trustee. For example, a settlor may desire to name a family member as trustee, but give a professional investment advisor the authority to direct trust investments. Or, a settlor may desire to name a professional fiduciary to administer the trust, but give an involved family member or business