Which trust type may be revoked by will or divorce?

Which trust type may be revoked by will or divorce?

• A. Spendthrift Trust
• B. Mandatory Trust
• C. Discretionary Trust
• D. Support Trust

Answer: (A)

Spendthrift provisions sit at the intersection of protection and control in trust design. A spendthrift trust is drafted to prevent the beneficiary from accessing or assigning the trust funds and to shield those funds from the beneficiary’s creditors. Because it often serves a protective purpose for someone who may not manage money well, some jurisdictions allow the terms to be altered or even terminated by a will or by a divorce decree to reflect a change in circumstances or to redirect assets. That flexibility is what makes this trust type the one that can be revoked by will or divorce. The other trust types involve more rigid or purpose-specific arrangements. A mandatory trust directs fixed distributions and is not generally subject to revocation to change those fixed terms. A discretionary trust gives the trustee broad discretion over distributions, but that discretion is part of the trust’s design and isn’t typically undone simply by a will or a divorce. A support trust is keyed to the beneficiary’s needs for support and also follows its defined purpose, with revocation by will or divorce not ordinarily occurring.

Spendthrift provisions sit at the intersection of protection and control in trust design. A spendthrift trust is drafted to prevent the beneficiary from accessing or assigning the trust funds and to shield those funds from the beneficiary’s creditors. Because it often serves a protective purpose for someone who may not manage money well, some jurisdictions allow the terms to be altered or even terminated by a will or by a divorce decree to reflect a change in circumstances or to redirect assets. That flexibility is what makes this trust type the one that can be revoked by will or divorce.

The other trust types involve more rigid or purpose-specific arrangements. A mandatory trust directs fixed distributions and is not generally subject to revocation to change those fixed terms. A discretionary trust gives the trustee broad discretion over distributions, but that discretion is part of the trust’s design and isn’t typically undone simply by a will or a divorce. A support trust is keyed to the beneficiary’s needs for support and also follows its defined purpose, with revocation by will or divorce not ordinarily occurring.