Modification and termination

Question 1

Ways for a trust to terminate

Answer 1

1. general: upon expiration of the term specified
2. terms: express terms (death, age, college, date)
3. settlor: UTC says a settlor can revoke of amend
4. revocation of irrevocable trust: written consent of all persons vested or contingent interests

Question 2

ways to have a revocation of irrevocable trust

Answer 2

1. settlors consent: consent of the settlor and all beneficiaries
2. w/o consent of settlor: all beneficiaries and can’t be material purpose that is frustrated

Question 3

When does the UTC allow for modification without all beneficiaries consent

Answer 3

1. if the trust could have been terminated had all the beneficiaries consented and
2. the interest of the beneficiary who doesn’t consent will be adequately protected

Question 4

termination by law

Answer 4

if the property has been exhausted or if the legal and equitable titles have merged

Question 5

termination by the court

Answer 5

will terminate or modify if
1. the trust could have been modified if all beneficiaries had consented and
2. interests of non-consenting beneficiary will be adequately protected

OR
1. unanticipated circumstance threaten the purpose of the trust
2. continuation is impracticable or wasteful or
3. value of trust is insufficient

Question 6

reformation of a trust

Answer 6

some states allow a reformation if the settlor’s intent is a mistake in terms shown by clear and convincing evidence

Question 7

When my a trust be terminated by the trustee

Answer 7

1. uneconomic trust: less than 50k and can’t justify managing
2. combination of division of trust: as long as doesn’t frustrate the purpose