question.jpgIn Trusts and Estates

How can a trust be terminated?

Trusts often contain their own express terms as to when they terminate. These terminations are often tied to the occurrence of some event or some particular date. For example, I may set up a trust to provide money to my son until he turns 25, and the trust may say that once he is 25, the trust is terminated and he gets the rest of the money. In addition, where the creator of the trust (the settlor) is still alive, and where he or she is permitted to modify the trust by state law and/or the provisions of the trust itself, he or she can also revoke the trust, which effectively terminates it.

Beneficiaries often want to terminate a trust early because they hope to get all of the trust property without any of the trust restrictions. They can go to court and ask the court to prematurely terminate the trust, but the court will only generally do this if the original purpose of the trust is no longer capable of being met.

Finally, trusts can also be terminated on their own when there is a merger (which is where all of the equitable title and legal title rights belong to one person).