5) Modification + Termination

Question 1

“revocable” def

Answer 1

covers termination AND modification

Question 2

is trust revocable?

Answer 2

presumption: YES revocable

irrevocable if:

• -expressly says so
• -all trusts created by wills

Question 3

modification: who can do it?

Answer 3

settlor, IF it’s revocable
but, if modifies too much, might destroy trust form (bc settlor has too much control)

if irrevocable, need court order + agreement of all beneficiaries

Question 4

modification: beneficiaries?

Answer 4

generally no
exception: beneficary can show special circs +
modification dn harm or defeat material purpose of settlor +
dn harm other beneficiaries

Question 5

termination: who can terminate?

Answer 5

settlor – IF revocable

beneficiary, as below

Question 6

termination: beneficiary: when

Answer 6

need both:

1) unanimous consent of all beneficiaries [result: can’t terminate if there are undetermined remaindermen, bc they can’t consent]
2) early termination will not defeat material purpose of the settlor in establishing the trust [result: spendthrift clauses can’t terminate early]

Question 7

termination by beneficiaries and spendthrift clause

Answer 7

can’t do it –> would violate the can’t-defeat-material-purpose-of-the-trust rule

Question 8

cy pres

Answer 8

charitable trusts only
if settlor had general charitable purpose + orig charitable interest becomes unattainable, court can consider changing it to a different purpose to keep the trust alive