Termination Of A Trust: A Practical Guide For Trustees

Trusts are intended to endure, often across generations. However, circumstances change: family dynamics evolve, assets are sold, restructured or decrease in value, beneficiary needs shift, tax regimes change. The original purpose of the trust may no longer be relevant or it may not be appropriate to keep the trust in existence for cost or other reasons.

How does a trust come to an end?

There are a number of ways in which a trust might terminate:

• By operation of law for lack of assets – the trustee (or settlor or other person if they hold a reserved power under the trust instrument) may make an appointment of the whole of the trust fund to one or more of the beneficiaries, resulting in no remaining assets in the trust.