Modification and Termination Flashcards
By Settlor
UTC: A settlor can revoke or amend a trust unless the terms expressly state that it is irrevocable.
Traditional: A trust is irrevocable unless the settlor expressly reserves the power to revoke or amend.
May be able to revoke an irrevocable trust upon written consent of all living persons with vested or contingent interests.
By Beneficiaries
A trust can be terminated or modified upon the consent of the settlor (or his agent/guardian) and all beneficiaries.
A trust can be terminated or modified on the consent of only the beneficiaries only if no material purpose of the trust would be frustrated.
*All beneficiaries includes unborn and unascertained beneficiaries, so a party must be appointed to represent their interests.
By Court
A court can modify or terminate a trust even without everyone’s consent if the trust could have been modified/terminated had they all consented and the interest of a beneficiary who does not consent will be adequately protected.
A court may also terminate or modify if continuing the trust doesn’t make sense (impracticable, not valuable enough).
By Trustee
A trustee can terminate if the trust property is less than $50,000 and insufficient to justify the cost of administration.
