Which statement correctly describes when a trust termination clause exists?

Which statement correctly describes when a trust termination clause exists?

• A. Expressly reserves right to terminate; otherwise, consent of benes and no interference with purpose
• B. Automatically terminates at a predetermined date
• C. Termination can be initiated by any beneficiary unilaterally
• D. The court must always approve termination

Answer: (A)

A termination power exists only when the trust instrument expressly reserves the right to terminate. If the instrument explicitly gives that power, termination can proceed under those terms. If there is no express termination provision, termination generally requires the unanimous consent of all beneficiaries and must not defeat the trust’s purpose. This protects the settlor’s intent and the beneficiaries’ interests, preventing a unilateral end to the trust. Automatic termination on a predetermined date isn’t assumed in every case; it depends on the instrument, and not all trusts include such a date. Allowing termination by any single beneficiary or mandating court approval in every case also isn’t accurate, as those scenarios depend on the exact terms and applicable law.

A termination power exists only when the trust instrument expressly reserves the right to terminate. If the instrument explicitly gives that power, termination can proceed under those terms. If there is no express termination provision, termination generally requires the unanimous consent of all beneficiaries and must not defeat the trust’s purpose. This protects the settlor’s intent and the beneficiaries’ interests, preventing a unilateral end to the trust. Automatic termination on a predetermined date isn’t assumed in every case; it depends on the instrument, and not all trusts include such a date. Allowing termination by any single beneficiary or mandating court approval in every case also isn’t accurate, as those scenarios depend on the exact terms and applicable law.