TERMINATION OF TRUSTS:
•    Pursuant to trust instrument
•    E.g. Income to J, remainder to S ? as per instrument, when J dies, trust ends
•    Prop 112.052 – termination at event or period of time
•    Revocation or revocable trust
•    Restatement – default = irrevocable and must state revocable
•    Texas is the opposite – default = revocable and must state irrevocable – see Prop 112.051
–    Lots of people signing up trusts without much thought – Texas and CA protect the unwary
–    Starting to change – presumption becoming revocable
•    All trust agreements should designate revocable or irrevocable
•    Barnette v. McNulty
–    Dacey Trust – how to avoid probate with forms
–    B sets up Dacey revocable trust, then divorce wife and makes will that leaves corpus to different person
–    Nonprobate transfer – won’t go through will
–    Trying to control property not subject to will
–    M says B revoked trust when made will
–    Court says oral revocation OK (fraud potential?!)
–    Oral revocations – generally acceptable
•    Real property: trust agreements, file deed putting in trustee’s name (revoke orally and world is mistaken as to owner)
•    Fraud problems
•    Texas rule prevents this
–    Restatement requires “manifest intention to revoke in any way unless instrument mandates specific”
•    Document – acts that are conclusive of revocation
•    Non-exclusive list that leaves room for other acts
–    Texas – Prop 112.051c – set up in written instrument then revocation must be in writing
–    Will revoked because inconsistent
–    Court says no case law because:
–    Will is not effective during lifetime and revocable must be revoked during lifetime
–    Depends on terms of revocable trust – if specified then must follow and most don’t contemplate will revocation
•    Modification:
–    Retain the right to revoke and MAY AMEND
–    Don’t have to revoke and set up new (lesser included)
–    Ineffective modification:
–    Tosh
•    Can’t just insert page
•    Prevents fraud potential
–    Must show definite intent, e.g sign page, etc.
•    Document interpretation cases:
–    Court – determining without knowing (crap shoot as to who is correct)
•    Completion of Purpose:
•    Frost v. Newton
–    Trust continues during life of H, A, and B, terminating at death of last
–    Trustee may terminate earlier if not have sufficient property ($465K) – inapplicable
–    Good Clause – it eliminates fees for trust with insufficient funds
–    A and B are alive – terminate trust?!
–    Dissent:
–    Two purposes:
•    Income for H (dead so completed)
•    Education of A and B’s children (done with school)
–    Therefore trust is done!  Purpose is completed regardless of what document says
–    Done automatically on completion
–    Majority:
–    No termination because have to complete as to purpose being only X and Y (may have other non-expressed reasons)
•    Especially in light of trust language that terminates at death
–    HAPID (?!?) because difficult to know when this time is
–    Prop 112.024 – must show all purposes have been fulfilled and that only those purposes exist
–    Poorly drafted – termination date totally inconsistent with distribution clause
•    Termination by Impossibility or Illegality
•    Judge may terminate
•    Termination by Consent
•    337 – all beneficiary are adult and competent – may terminate if not frustrating material purpose
•    338 – Settlor and beneficiary may agree
–    Since settlor is alive, don’t have to look at material purpose, since can change mind
•    Must have consent of all beneficiaries and can’t violate a material purpose (US “Claflin doctrine”):
–    Fact that has more than one beneficiary is not material
–    Spendthrift trust language is material
•    In England, can do anything – testator intent is disregarded
–    Claflin doctrine prevents this in the US
•    Bayley
–    Prop 123.002, 123.003
–    Parens patriae – AG represents all charities so that charities don’t have to litigate
–    Charity wins and trust terminated
•    Hatch
–    Self-settled trust
–    Refuses to apply doctrine of worthier title
–    Court says “to X and remainder to Y” means exactly that
–    Prop 5.042a – also dismisses Rule in Shelley’s Case
–    Court says can’t terminate trust because heirs (who are these people!?  They’re determined at death!) have remainder
–    Can appoint guardian ad litem, but they’re then arguing for settlor to give all because will get it all when settlor dies
•    Power of appointment could take all benefits from remaindermen
•     NY doesn’t require unborn consent (Restatement 3rd agrees)