Trusts

Question 1

Irrevocable Trust

Answer 1

An irrevocable trust may be terminated upon the consent of all beneficiaries and the consent of the settlor. In absence of the consent of the settlor, the trust may be terminated if all
beneficiaries agree and there is no valid trust purpose yet to be served.

Question 2

Conditions in trust instruments

Answer 2

Conditions in trust instruments that discourage marriage will not be upheld as against public policy. In contrast, a clause that states that income should be provided until remarriage for support would likely be upheld.

Question 3

Gift Lapse

Answer 3

At common law, a recipient of a gift in a trust that predeceases a possessory interest is a gift lapse, and the gift fails. In the case of class gifts including a lapsed gift to one of the class members, the remaining class members take.

Question 4

Anti-Lapse Statute

Answer 4

Under the UPC (and many states), when a gift is made to a grandparent or descendent of a grandparent of the settlor who leaves issue, and the gift lapses, the anti-lapse statute passes the interest in the predeceased’s issue.