A court
will modify a trust where the trust's leading purpose is
frustrated by a specific directive made by the trustor.
MODIFICATION
A court will modify a trust where the trust's leading
purpose is frustrated by a specific directive made by
the trustor. In such instances, the directive will be
struck in order to accomplish the trustor's primary
intention.
When a trustor provides no power to invade the principal
and the income generated by the trust is insufficient to
support the beneficiary, a court may allow a
distribution of income. Such distribution is allowed
only if the beneficiary's support or education is not
sufficiently provided for and if the trust's purpose
cannot be attained without the distribution.
TERMINATION
A trust ends automatically
at the end of the time specified in the document that
created it. If a trustor has reserved the power to
revoke a living trust, he may do so at any time. If a
living trust is not revocable, the trustor and all the
beneficiaries have to consent to revocation. If any
beneficiary is a minor or is incompetent, the trust
cannot be revoked because minors and incompetents
cannot, by law, give consent. Any revocation of a living
trust must be in writing and signed, acknowledged, or
witnessed in the same manner as was required to create
the trust. Notice of the revocation should be delivered
to the trustee in a reasonable time, but failure to
deliver such notice does not affect the validity of the
revocation.
Even if all the beneficiaries consent, a testamentary
trust cannot be terminated if the termination would be
in contrast to the purposes of the trustor. In those
jurisdictions that automatically give limited
spendthrift protection to all income interests, courts
cannot terminate a testamentary trust upon application
by the beneficiaries because to do so would frustrate
the primary purpose of giving spendthrift protection to
the beneficiaries. Testamentary trusts in which the
beneficiaries are allowed to transfer their interest may
be ended by them if no other material purpose of the
trustor is to be served.
Copyright 2006 LexisNexis,
a division of Reed Elsevier Inc.
