Trusts terminate by their terms, on exhaustion of assets, when purposes are fulfilled or become impossible, or by consent where no material purpose remains. Small trust provisions permit termination below defined values.
Spendthrift provisions frequently block consent termination.
Alternative Names:
Trust Termination|Early Termination
Why it Matters?
Small trust termination provisions permitting a trustee to terminate uneconomic trusts below a statutory threshold are the practical route in many cases, avoiding the material purpose analysis that consent termination requires. Beneficiary consent termination is otherwise blocked where a spendthrift clause is treated as a material purpose, which is the majority position and forecloses the route in most modern trusts.
Frequently Confused with
Related terms
Frequently asked questions
What is the practical termination route?
Why does consent termination usually fail?
