                                 CODE OF VIRGINIA

DISCRETIONARY POWERS; TAX SAVINGS (§ 64.2-776)

A. Notwithstanding the breadth of discretion granted to a trustee in the terms
of the trust, including the use of such terms as &#8220;absolute,&#8221;
&#8220;sole,&#8221; or &#8220;uncontrolled,&#8221; the trustee shall exercise a
discretionary power in good faith and in accordance with the terms and purposes
of the trust and the interests of the beneficiaries.

B. Subject to subsection D, and unless the terms of the trust expressly indicate
that a rule in this subsection does not apply:

   1. A person other than a settlor who is a beneficiary and trustee of a trust
   that confers on the trustee a power to make discretionary distributions to or
   for the trustee&#8217;s personal benefit may exercise the power only in
   accordance with an ascertainable standard; and

   2. A trustee may not exercise a power to make discretionary distributions to
   satisfy a legal obligation of support that the trustee personally owes another
   person.
   				For purposes of this subsection, &#8220;trustee&#8221; includes a person
   who is deemed to have any power of a trustee, whether because such person has
   the right to remove or replace any trustee or because a reciprocal trust or
   power doctrine applies.

C. A power whose exercise is limited or prohibited by subsection B may be
exercised by a majority of the remaining trustees whose exercise of the power is
not so limited or prohibited. If the power of all trustees is so limited or
prohibited, the court may appoint a special fiduciary with authority to exercise
the power.

D. Subsection B does not apply to:

   1. A power held by the settlor&#8217;s spouse who is the trustee of a trust
   for which a marital deduction, as defined in &#xA7; 2056(b)(5) or 2523(e) of
   the Internal Revenue Code of 1986, as in effect on the effective date of this
   chapter, or as later amended, was previously allowed;

   2. Any trust during any period that the trust may be revoked or amended by its
   settlor; or

   3. A trust if contributions to the trust qualify for the annual exclusion
   under &#xA7; 2503(c) of the Internal Revenue Code of 1986, as in effect on the
   effective date of this chapter, or as later amended.

HISTORY: 2005, c. 935, § 55-548.14; 2012, c. 614; 2013, c. 324.