Trust Termination Policy
Upon request, the commissioner may approve the termination of a supervised trust of $100,000 or less, if deemed uneconomic, pursuant to proper notice and upon presentation of a plan consistent with the settlor’s intent. See Virginia Code § 64.2-732. The fiduciary may wish to seek legal advice regarding the termination of a supervised trust. This office cannot give legal advice. The policy is stated below.
COMMISSIONER OF ACCOUNTS POSITION ON VIRGINIA CODE § 64.2-732
The commissioner of accounts may approve the termination of a testamentary trust in accordance with the provisions of Virginia Code § 64.2-732. The following documents should accompany the request to terminate the testamentary trust:
- Statement as to why the value of the trust assets is insufficient to justify the costs of administration.
- Written consent of the qualified (current) beneficiaries to the termination of the trust and to the plan of distribution.
- Evidence of notice to all beneficiaries or their representatives.
- A plan of distribution and a statement as to why such plan is consistent with the testamentary intent of the trustor.
In the event that the commissioner believes that either the termination or the plan of distribution is contrary to the testator’s intent, then the commissioner will decline to approve the termination of the trust. The trustee may seek review of the commissioner’s determination from the Court.
If termination of the uneconomic trust is granted, a final account must be filed by the trustee and approved by the commissioner.