David M. Frees, III
In some cases when the settlor is not able to give consent, he or she has passed away,or beneficiaries cannot be determined (like unborn grandchildren) then the court will have to approve with everyone's consent. Be aware the court will also approve without everyone's consent if the non-agreeing parties interests are adequately protected despite the proposed change. A trust may also be terminated if the trust does not achieve any material purpose.
In short, if a trust needs to be modified or terminated, you need to make sure the settlor and all the beneficiaries agree and if they do not you have to get court approval to terminate without everyone's consent. Consider having a consultation with legal counsel to make sure that you get off on the right foot and start following the trustee rules from the beginning of the trust administration. The better relationship you have formed with the beneficiaries, by doing things like keeping them up to date on the trusts assets, the better chance you have to get everyone's consent when it comes time for you to change or terminate the trust document.
See all ten of our articles on How To Avoid The Most Common Mistakes Trustees Make:
Avoiding Trustee Mistakes No. 1: Trustees Failing To Understand The Trust Language
Avoiding Trustee Mistakes No. 2: Trustees In Trouble Making Early Distributions
Avoiding Trustee Mistakes No. 3: Trustees Failing To Follow The Prudent Investor Rule
Avoiding Trustee Mistakes No. 4: Trustees Failing To Follow The Uniform Trust Act
Avoiding Trustee Mistakes No. 5: Trustees Failing To Follow The Principle And Income Act
Avoiding Trustee Mistakes No. 6: Trustees Failing To Communicate Properly
Avoiding Trustee Mistakes No. 7: Failing To Properly Reform, Amend, Or Terminate
Avoiding Trustee Mistakes No. 8: Failing To File Tax Returns Or To Seek Professional Assistance
Avoiding Trustee Mistakes No. 9: Failing To Understand The Role Of Multiple Trustees
Avoiding Trustee Mistakes No. 10: Trustees Failing To Do The Job
David M. Frees III
Representing trustees and executors
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