ABA Family Legal Guide

Estate Planning

Trusts and Living Trusts

Setting Up and Maintaining a Trust

What about irrevocable trusts? How do they end?

Your trust should have a termination provision even if it is an irrevocable trust. Irrevocability means that you, the donor, can't change your mind about how you want the trust to terminate. It doesn't mean that you can't set up termination procedures in the first place.

If you have an irrevocable trust and don't have a termination provision, the trust can usually terminate only if all beneficiaries consent and no material purpose of the trust is defeated. However, an irrevocable trust can also be terminated if there was fraud, duress, undue influence, or other problems when the trust was set up; if the operation of the trust becomes impracticable or illegal; or if the period of time specified in state law expires. We're obviously into technical territory here, so the basic rule is, don't set up an irrevocable trust unless you're prepared to live—and die—by its terms.