Trust Modification

Question 1

When can a trust terminate?

Answer 1

Expires at the end of a stated term.

Material purpose is satisfied.

Unfulfilled material purpose doctrine (Claffin): A trustee can block a premature termination if trust is still serving some material purpose.

Settlor can terminate if reserved the right. If not, settlor and all beneficiaries must consent.

Question 2

When can a trust be modified?

Answer 2

If settlor is alive
- Can unilaterally modify if expressly reserved right, if not, all beneficiaries must consent and must not interfere with purpose of trust.

If settlor is dead

• All beneficiaries agree, consistent with material purpose of trust.
• Unforeseen event has frustrated purpose of trust.

Question 3

When can a trustee be removed?

Answer 3

Remedy when fiduciary duty has been breach

Trustee incapable of performing duties (jail), incapacitated, seriously ill

Conflict of interest

Trustee can resign with written notice, if settlor is alive, to co-trustee and beneficiaries.