Tuesday, June 3, 2014
The Florida Second District Court of Appeal recently held the trial court acted within its discretion when it determined that, an irrevocable trust could be terminated the settlor and beneficiaries of an irrevocable trust consented. Termination could take place evin if it would be in conflict with the intentions of the party who funded the trust.
The facts of the case are as follows: Bernard Peck executed a Last Will and Testament that left assets to a marital trust for the benefit of his wife. Upon the death of his wife, the remaining assets in the trust were to be distributed to an irrevocable trusts for his children, Constance and Daniel. Bernard funded Constance’s trust (CLP Trust) with gifts he made to her, and Daniel was named as the successor trustee of the CLP Trust.
Bernard died in 2009, and in 2012, Constance filed a petition to terminate the CLP trust. Her grandchildren agreed to the termination but Daniel objected as co-trustee. The trial court terminated the CLP Trust and noted that section 736.04113 provides that "the provisions of this section are in addition to, and not in derogation of, rights under the common law to modify, amend, terminate or revoke trusts" and so the court still had the authority to terminate the trust.
See Proskauer Rose LLP, Florida District Court of Appeal Upholds Trial Court’s Determination that, Under Common Law, an Irrevocable Trust Can be Terminated with Consent of Settlor and All Beneficiaries, Wealth Management, May 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.