Can a trust be modified or terminated?
If the settlor and all the beneficiaries consent a trust may be modified. If the trust is revocable by the grantor he can take the property back. If the trust is irrevocable, the parties can terminate if they all sign on and if the material purpose of the grantor will not be changed. The trustee has no beneficial interest and cannot object. Such a right to modify and terminate exists even if the trust contains a spendthrift clause. Under New York law, a statutory spendthrift trust cannot be terminated by beneficiaries as the settlor’s participation is required under statute. This means that if the settler is dead, or if it’s a testamentary trust, the trust cannot be terminated.
