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TRUST ADMINISTRATION AND TAXATION
 
Copyright 2016, Matthew Bender & Company, Inc., a member of the LexisNexis Group.


1-21 TRUST ADMINISTRATION AND TAXATION 21.syn


Title

Right of Settlor or Beneficiaries to Revoke or Otherwise Terminate Trust--Power of Amendment

Author

Walter L. Nossaman;Joseph L. Wyatt, Jr.

Chapter Summary


ABSTRACT TEXT:

This chapter from Trust Administration and Taxation addresses the revocation or termination of a trust. Normally, a trust will continue until the trust purposes have been accomplished, even though the instrument evidencing its creation fails to specify the time for termination. The chapter addresses termination generally of a trust. The acquisition by the income beneficiary of the remainder interest under a trust effects no automatic termination, but renders operative whatever rules pertain in the particular jurisdiction as to terminability generally. A trust which has become passive will be terminated by a court of equity, and the property conveyed to the beneficial owner. Termination at trustee's discretion is also covered. A reserved or conferred power to amend, unless appropriately limited, can be exercised in such manner as to create a reversion in the settlor, thereby enabling him to revoke the trust. The same result may be reached by an amendment expressly giving the right of revocation.

This chapter also discusses revocation. Many states hold that no right of revocation exists unless expressly reserved. Some states, such as California and Texas, hold that a trust is revocable unless expressly declared to be irrevocable. The right to revoke as derived from the power to appoint or terminate is discussed. The right of the settlor's guardian to revoke is also addressed.

The chapter next addresses the requirements for amendment, which, insofar as modification may affect the interests of beneficiaries, present and prospective, are the same as for termination. The chapter then addresses modifications by court pursuant to agreements by parties and acceptance of modification by trustee.

In addition, the chapter discusses the rule in Shelley's Case, the effect of intent on terminability, and the court's power to terminate early. The right of beneficiaries to partition or combine trusts is also covered.

Trust Administration and Taxation (Matthew Bender) is a well-documented, practical text on establishment, administration, and taxation of trusts. It covers several topics, including revocable living trusts; charitable remainder trusts; pension and profit-sharing trusts; trustees' responsibilities; beneficiary rights to principal and income distributions; the rights of creditors; periodic and final accountings; and state and federal taxation of trusts and beneficiaries.

CORE TERMS:

trust,beneficiaries,beneficiary,settlor,revocation,revoke trust,terminate trust,amend trust,amendment,termination,trustee,income beneficiary,remainder interest,automatic termination,passive trust,court termination,settlor's guardian,revocable trust,irrevocable trust,partition,trust partition,Shelley's case

RELATED CHAPTERS: (View)

For a general discussion of rights and liabilities of a beneficiary, see Chapter 20, Rights and Liabilities Generally of Beneficiaries.

For more on a beneficiary's rights under a trust, see Chapter 23, Nature of Beneficiary's Rights Under Trust, and in Trust Property.

For a discussion of the rights of creditors of a beneficiary, see Chapter 24, Rights of Creditors of Settlor and Beneficiary.

OTHER RELATED PUBLICATIONS:

See California Trust Practice (Matthew Bender) for guidance on advising the non-professional trustee, allocating and distributing assets to bypass and marital deduction trusts, implementing and using administrative trusts, handling claims by and against post-mortem trusts, and evaluating the need for court supervision.

See Modern Estate Planning (Matthew Bender) for coverage of all key estate planning topics, including gift taxation, transfers and interests subject to estate and gift taxation, estate and gift tax deductions, exclusions and credits, and generation-skipping transfers.

See Planning for Large Estates (Matthew Bender) for analysis of the latest legal trends, planning notes, illustrative examples, practice forms, and tax-saving techniques for handling large estates, with coverage of estate freezing, corporate recapitalizations, multi-tier family partnerships, sales techniques, intrafamily and charitable gift techniques, and valuation of intrafamily transfers.
 
 
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