Modification and Termination of Trusts

Question 1

When can settlor modify a trust

Answer 1

Common law: presumes trusts are irrevocable unless the trust expressly provides that the settlor may revoke or amend the trust
UTC: presumes trusts are fully revocable or amendable unless the terms of the trust expressly provide to the contrary

Question 2

When may settlor terminate an irrevocable trust?

Answer 2

Settlor may terminate an irrevocable trust only with consent of all the beneficiaries who are living at the time

Question 3

When does a trust end by merger

Answer 3

A trust ends if the sole trustee becoems the sole beneficiary through the doctrine of merger

Question 4

When does trust terminate by operation of law

Answer 4

A trust terminates by operation of law where:
- the trust res has been consumed, destroyed or lost
-the trust’s purposes have been fully accomplished
-accomplishment of the material purposes of the trust have become illegal, impossible or impractical

Question 5

What is the Clafflin Doctrine

Answer 5

After the settlor’s death, the trust cannot be terminated before the time specified by the settlor if the material purposes of the trust have not yet been accomplished, even if all of the other beneficiaries agree

Question 6

What are the ways in which trust may be terminated or modified?

Answer 6

1. By settlor
2. By merger
3. operation of law
4. by beneficiaries after settlor’s death