Modification and Termination

Question 1

Termination of Irrevocable Trust

Answer 1

1. Accomplished purpose;
2. Unanimous consent all Bs (born/unborn = majority) not Substantially Impaired;
3. S and unanimous Bs;
4. Operation of Law:
5. Frustrated or Impossible to complete;
6. Merger (T is sole B);
7. Expiration of term.

AUSI-SUB-OLFIME (Accomplished Unanimous Substantially Impaired - Settlor Unanimous Bs - Operation Law Frustrated Impossible Merger Expiration)

Question 2

Revocable or Irrevocable?

Answer 2

1. Majority, S not permitted unless Reserved;
2. Minority, S permitted unless Expressly Irrevocable;
3. T who is not S may not unless Power of Termination provided in trust.

MaNUR-MiPUER-TUPOT (Majority Not Unless Reserved - Minority Permitted Unless Expressly Reserved - T Unless Power of Termination)

Question 3

Claflin doctrine

Answer 3

1. Unanimous Bs and
2. no Substantial impairment of material purpose;
3. UTC, no unanimous if non-consenting Bs interests protected;
4. Restatement requires unanimous Bs but applies balancing test.

USIMP-NUNC-RUB (Unanimous Substantial Impairment Material Purpose - No Unanimous Non Consenting Restatement Unanimous Balancing)

Question 4

Equitable deviation (changed circumstances)

Answer 4

1. Unanimous Bs
2. Status quo would substantially impair;
3. Modernly, modify if furthering trust purpose for admin and dispositive terms.

USQIS-FAD (Unanimous Status Quo Impair Substantially Further Admin Dispositive)

Question 5

Cy pres

Answer 5

1. Modify if
2. Illegal, impracticable, or impossible
3. finding of General charitable intent
4. As close as possible
5. Modernly, general intent is presumed; and
6. Reasonable approximation sufficient.
7. Resulting trust if counter to S’s intent.

III-GAPART (Illegal Impracticable Impossible General As Presumed Approximation Resulting Trust)