CHAPTER 425

An Act to amend the Code of Virginia by adding a section numbered
64-57.2, so as to provide for incorporation by reference certain powers
of fiduciaries into will and trust instruments. CH 629]

Approved April 1, 1966

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia be amended by adding a section numbered
64-57.2, as follows:

§ 64-57.2. (1) The following powers, in addition to all other powers
granted by law, may be incorporated in whole or in part in any will or
trust instrument by reference to this section:

“‘(a) To keep and retain any or all investments and property, real,
personal or mixed, including stock in the fiduciary institution, if the same
be a corporation, as they may be at the time they come into the custody
of said fiduciary, regardless of the character of same or whether they are
such as then would be authorized by law for investment by fiduciaries or
whether a disproportionately large part of the trust estate remains in-
vested in one or more types of property, for such time as the fiduciary
shall deem best, and to dispose of such property by sale, exchange, or
otherwise as and when such fiduciary shall deem advisable.

“(b) To sell, assign, exchange, transfer and convey or otherwise
dispose of, any or all of the investments and property, either real, per-
sonal or mixed, which may be included in, or may at any time become
part of the trust estate upon such terms and conditions as the fiduciary

his absolute discretion, may deem advisable, at either public or private
sale, either for cash or deferred payments or other consideration, as such
fiduciary may determine; and for the purpose of selling, assigning, ex-
changing, transferring or conveying the same, to make, execute, acknowl-
edge and deliver any and all instruments of conveyance, deeds of trust,
or assignments in such form and with warranties and covenants as such
fiduciary may deem expedient and proper; and in the event of any sale,
conveyance, exchange, or other disposition of any of the trust estate, the
purchaser shall not be obligated in any way to see to the application of
the purchase money or other consideration passing in connection there-

th.

“(c) To invest and reinvest all of the funds of the estate as said
fiduciary, in his sole discretion, may deem best, including investment in
stocks, common and preferred, and common trust funds, without being
restricted to those investments expressly approved by statute for invest-
ment by fiduciaries; and to change investments from realty to personalty,
and vice versa. ;

“‘(d) To lease any or all of the real estate, which may be included
in or at any time become a part of the trust estate, upon such terms and
conditions as said fiduciary, in his sole judgment and discretion, may deem
advisable, and any lease or leases made by such fiduciary may extend be-
yond the term of the trust and for the purpose of leasing said real estate,
to make, execute, acknowledge and deliver any and all instruments, in
such form and with such covenants and warranties as such fiduciary may
deem expedient and proper.

“(e) To vote any stocks, bonds, or other securities held by such
fiduciary at any meeting of stockholders, bondholders, or other security
holders, and to delegate the power to so vote to attorneys-in-fact or proxies
under power of attorney, restricted or unrestricted.

“‘(f) To borrow money for such periods of time and upon such terms
and conditions as to rates, maturities, renewals and security as to such
fiduciary shall seem advisable, including the power to borrow from the
fiduciary, if the fiduciary be a bank, for the purpose of paying debts, taxes
or other charges against the trust estate or any part thereof, and to
mortgage or pledge such portion of the trust estate as may be required
to secure such loan or loans; and as maker or endorser to renew existing

“(g) To compromise, adjust, arbitrate, sue on or defend, abandon,
or otherwise deal with and settle claims, in favor of or against the
estate as the fiduciary shall deem best, and his decision shall be conclusive.

“(h) To make distributions in cash or in kind or partly in each at
valuations to be determined by the fiduciary, whose decision as to values
shall be conclusive.

“‘(i) To determine whether any part of the trust estate or any addi-
tion or increment thereto be income or principal, or whether any cost,

, expense, tax or assessment shall be charged against income or
principal, or partially against income and partially against principal.

““(j) To repair, alter, improve, renovate, reconstruct and demolish
any of the buildings on the real estate held by such fiduciary and to con-
struct such buildings and improvements thereon as such fiduciary may
in his discretion, deem advisable.

“*“(k) To employ and compensate, out of the principal or the income
or both as to the fiduciary shall seem proper, agents, accountants, brokers,
attorneys-in-fact, attorneys at law, tax specialists, realtors, and other
assistants and advisors deemed by the fiduciary needful for the proper
administration of the trust, and to do so without liability for any neglect,
omission, misconduct, or default of any such agent or professional rep-
resentative provided he was selected and retained with reasonable care.

“(1) To rely upon any affidavit, certificate, letter, notice, telegram,
or other paper or upon any telephone conversation believed by such fidu-
ciary to be genuine and upon any other evidence believed by such fiduciary
to be sufficient, and to be protected and saved harmless in all payments
or distributions required to be made hereunder if made in good faith and
without actual notice or knowledge of the changed condition or status of
any person receiving payments or other distributions upon a condition.

“(m) To retain any interest held by such fiduciary in any business,
whether as a stockholder or security holder of a corporation, a partner,
a sole proprietor, or otherwise, for any length of time, without limita-
tions, solely at the risk of the trust estate and without liability on the
part of the fiduciary for any losses resulting therefrom; to participate in
the conduct of such business and take or delegate to others discretionary
power to take any action with respect to its management and affairs which
an individual could take as the owner of such business, including the voting
of stock, and the determination of any or all questions of policy; to partici-
pate in any incorporation, reorganization, merger, consolidation, recapi-
talization or liquidation thereof; to invest additional capital in, subscribe
to additional stock or securities of, and loan money or credit with or with-
out security to, such business out of the trust property; to elect.or employ
as directors, officers, employees or agents of such business, and compen-
sate, any persons, including the fiduciary or a director, officer, or agent of
the fiduciary ; to accept as correct financial or other statements rendered by
the business from time to time as to his conditions and operations except
when having actual notice to the contrary; to regard the business as an
entity separate from the trust estate with no duty to account to any court
as to his operations; to deal with and act for the business in any capacity,
including any banking or trust capacity and the loaning of money out of
the fiduciary’s own funds, and to be compensated therefor; and to sell or
liquidate such interest or any part thereof at any time. If any business
shall be unincorporated, contractual and tort liabilities arising out of such
business shall be satisfied, first, out of the business, and second, out of
the trust estate; but it is intended that in no event shall there be a liability
of the fiduciary, and if the fiduciary shall be held liable, such fiduciary
shall be entitled to indemnification from the business and the trust estate
in the order named. Such fiduciary shall be entitled to such additional com-
pensation as is commensurate with the time, effort, and responsibility
involved in his performance of services with respect to such business. Such
compensation for services rendered to the business may be paid by such
fiduciary from the business or from other assets or from both as the
fiduciary, in his discretion, may determine to be advisable; the amount of
such additional compensation, however, to be subject to the final approval
of the court. ,

“(n) To do all other acts and things not inconsistent with the pro-
visions of the will or trust in which these powers are incorporated which
such fiduciary may deem necessary or desirable for the proper manage-
ment of the trusts herein created, in the same manner and to the same
extent as an individual might or could do with respect to his own property.

“(o) To held property in his name or in the name of nominees. .

“(p) During the minority or the disability of any beneficiary, th
fiduciary may, in his sole discretion, distribute income and principal to
such beneficiary in any one of the following ways: (1) directly to said
beneficiary; (2) to a relative, friend, guardian, or committee, to be
expended by such person for the education, maintenance, support or bene-
fit of said beneficiary; or (8) by himself expending the same for the edu-
cation, maintenance, support or benefit of said beneficiary.

“(q) To continue and carry on any farming operation transferred
to him and to operate such farms and any other farm which may be
acquired and, in so doing, by way of illustration and not in limitation of
his powers, to operate the farm with hired labor, tenants or sharecroppers;
to hire a farm manager or a professional farm management service to
supervise the farming operations; to lease or rent. the farm for cash or
for a share of the crops; to purchase or otherwise acquire farm machinery
and equipment and livestock; to construct, repair and improve farm
buildings of all sorts needed, in its judgment, for the operation of the
farm; to make loans or advances or to obtain such from any source, includ-
ing the fiduciary at the prevailing rate or rates of interest for farm pur-
poses such as for production, harvesting, or marketing, or for the con-
struction, repair, or improvement of farm buildings or for the purchase
of farm machinery or equipment or livestock; to employ approved soil
conservation practices in order to conserve, improve and maintain the
fertility and productivity of the soil; to protect, manage and improve the
timber and forest on the farm and sell the timber and forest products
when it is to the best interest of the estate or trust; to ditch and drain
damp or wet fields and areas of the farm when and where needed; to
engage in livestock production, if it is deemed advisable, and to construct
such fences and buildings and plant such pastures and crops as may be
necessary to carry on such a livestock program; to execute contracts, notes
and chattel mortgages relating to agriculture with the Commodity Credit
Corporation, the United States Secretary of Agriculture or any other
officer or agency of the federal or State governments, to enter into acreage
reduction agreements, to make soil conservation commitments, and to do
all acts necessary to cooperate with any governmental agricultural pro-
gram; and in general, to employ the methods of carrying on the farming
operation that are in common use by other landowners in the community
in which the farm is located, inasmuch as the duties the fiduciary is re-
quested to assume with respect to farming operations may considerably
enlarge and increase his usual responsibility and work as fiduciary, it is
agreed that the fiduciary shall be entitled to such additional reasonable
compensation as is commensurate with the time, effort and responsibility
involved in his performance of such services.”

(2) As used in the section, the term “fiduciary” shall mean and
include one or more individuals or corporations having trust powers and
the use of the male gender shall include the female; and any substitute,
added or successor fiduciary shall have all of the powers hereby provided
for the fiduciary named in the will or trust instrument.