Modification/Termination

Question 1

Modify/Revoke

Answer 1

• Settlor may revoke unless right reserved
• Power to revoke usually includes power to amend
• In California, presumed revocable unless specified irrevocable

Question 2

Modify/Revoke: Doctrine of Changed Circumstances

Answer 2

-Judicial modification
Rules:
-upon change of circumstances unanticipated by settlor
-court can authorize deviation from administrative terms
-if:
-necessary to achieve trust purpose; AND
-does not deprive beneficiaries of their interest

*Note: cy pres doctrine allows court to modify charitable trust

Question 3

Termination by Trustee

Answer 3

Trustee–no power to terminate except as provided, or purpose accomplished

Question 4

Termination by Beneficiaries

Answer 4

May compel if:

• all competent; AND
• all consent; AND
• does not frustrate any purpose of trust (e.g. spendthrift; not terminable unless all beneficiaries AND settlor agree)

Question 5

Termination by Settlor

Answer 5

• if power reserved; AND

- he complies with instrument

Question 6

Termination by Operation of Law

Answer 6

• purpose frustrated/impossible to complete (cy pres doctrine or doctrine of changed circumstances allows court to modify); OR
• merger (e.g. trustee acquires life income estate in trust)