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Understanding Trust Termination: Legal and Practical Considerations

Learn the various ways a trust can terminate, from the settlor's revocation to court orders and beneficiary deaths, along with trustee's duties upon termination. Explore the legal and financial implications.

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Understanding Trust Termination: Legal and Practical Considerations

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Presentation Transcript

  1. Termination

  2. When does a trust terminate?

  3. When does a trust terminate? • 1. Express terms of trust • Most common method • § 112.052

  4. When does a trust terminate? • 2. Settlor revokes • § 112.051

  5. When does a trust terminate? • 3. Property exhausted • No trust without property • § 112.005

  6. When does a trust terminate? • 4. Uneconomical • Notice to beneficiaries • Current distributees • Permissible distributees • Distributees if trust terminated now • Value < $50,000 • Trustee determines purpose not justify cost of continuing trust • No adverse estate tax result • Trust not contain a conservation easement

  7. When does a trust terminate? • 5. Court order • Deviation • § 112.054

  8. When does a trust terminate? • 6. Merger • Legal and equitable title reunited. • § 112.034

  9. When does a trust terminate? • 7. All beneficiaries die

  10. Trustee’s duties upon termination • 1. Wind up trust business • Trustee retains trust powers for “reasonable” period. • § 112.052

  11. Trustee’s duties upon termination • 2. Distribute trust property to remainder beneficiaries • Must be done timely. • § 112.052

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