There is an old saying familiar to many in Seattle: “nothing lasts forever.” While it may seem like a tired cliché to you, it is nevertheless true as it relates to a trust. As the grantor of a trust, not only do you have some say as to how and when the trust comes to an end, you also have a responsibility to determine what happens afterward.
According to FindLaw, there are three different ways that a trust can come to an end. The grantor can stipulate that the trust will end upon a beneficiary meeting a certain condition. For example, you could arrange for the trust to end once your beneficiary graduates from high school or college. The grantor can also designate a specific date on which the trust is to end, such as a beneficiary’s 18th or 21st birthday. The third way that a trust may end is if the property held in trust becomes exhausted. In other words, there is only a finite amount of property within a trust, and once your beneficiaries have received all the assets, it means the trust is at its end.
If you intend for the trust to end before exhaustion of the assets, then you have a responsibility not only to set the terms upon which the trust comes to an end but also what the trustee is to do with any property that remains. Failure to do so means that your trustee and any beneficiaries will have to work together to decide upon a fair way to distribute the remaining property. If they cannot come to an agreement, the case may have to go into litigation.
The information in this article is not intended as legal advice but provided for educational purposes only.