By Kristen Matthews, Esquire, CELA
Even when a trust is established with a clear purpose and the best intentions, over time a trust’s original purpose may lose its relevance. As attorneys, we often create trusts in order to protect a beneficiary from themselves and others. However, what options are available to a trust beneficiary who is no longer disabled, has matured and is now capable of sound financial decisions, or is no longer facing creditor and liability claims or marital discord. What options are available to a trustee who has managed a trust well, the trust has served its purpose, but the trust balance is now small and no longer economical to continue?
Beneficiaries and Trustees who find themselves in these and other similar situations may be glad to learn that Pennsylvania law may permit termination of that trust, even before its stated term expires.
When the Grantor (the individual who established the trust) is still living, the trust may be terminated simply by obtaining the written consent of the Grantor and all of the trust beneficiaries. When the Grantor has passed, the Trustee may terminate the trust upon written notice to and consent of all of the trust beneficiaries.
While termination by consent is often an option, there are situations which will require Court approval, including those where obtaining unanimous consent of the parties to the trust is not possible.
If you are Trustee or beneficiary of a trust, and you find yourself in a situation where that particular trust no longer makes sense, trust termination may be possible. We can review the trust document, explore the relationship of the parties to the trust (Grantor, Trustee, and beneficiaries) and assess whether trust termination is an option.
Kristen R. Matthews works closely with individuals on a wide variety of estate and trust planning and administration matters. She is an experienced elder law attorney and assists clients with matters including advance and crisis Medicaid planning, guardianships, special needs trusts, and Veterans Pension benefits.
To schedule a consultation with Kristen, call 610-840-0272.