How Do I Terminate a Trust in Wyoming?
Full Question:
Answer:
The grantor has the ability to change or cancel a revocable living trust at any time and for any reason he or she deems appropriate, as long as he or she is not incapacitated. Unlike irrevocable living trusts, revocable living trusts do not require the beneficiaries’ consent before any changes or termination occur. With an irrevocable trust, one could file a Motion to Terminate Trust with the probate court.
I suggest reading the trust document carefully to determine whether of not it is revocable and any provisions for termination it contains.
Please see the following WY statutes to determine applicability:
4-10-411. Modification or termination of trust; proceedings for
approval or disapproval.
(a) In addition to the methods of termination prescribed by W.S. 4-10-412
through 4-10-415, a trust terminates to the extent the trust is revoked
or expires pursuant to its terms, no material purpose of the trust
remains to be achieved or the purposes of the trust have become unlawful,
contrary to public policy or impossible to achieve.
(b) A proceeding to approve or disapprove a proposed modification or
termination under W.S. 4-10-412 through 4-10-417, or trust combination or
division under W.S. 4-10-418, may be commenced by a trustee or
beneficiary, and a proceeding to approve or disapprove a proposed
modification or termination under W.S. 4-10-412 may be commenced by the
settlor. The settlor of a charitable trust may maintain a proceeding to
modify the trust under W.S. 4-10-414.
4-10-412. Modification or termination of noncharitable irrevocable
trust by consent.
(a) If upon petition the court finds that the settlor and all qualified
beneficiaries consent to the modification or termination of a
noncharitable irrevocable trust, the court may enter an order approving
the modification or termination, even if the modification or termination
is inconsistent with a material purpose of the trust. A settlor's power
to consent to a modification or termination of a trust may be exercised
by an agent under a power of attorney only to the extent expressly
authorized by the power of attorney or the terms of the trust or, if no
agent is so authorized, then by the settlor's conservator or guardian.
Exercise of the settlor's power to consent by an agent, conservator or
guardian shall be in each case with the approval of the court upon a
finding by the court that such action is not inconsistent with the
settlor's purpose or intent.
(b) A noncharitable irrevocable trust may be modified or terminated by a
trust protector provided that the terms of the trust authorize a
protector and grant the trust protector the power to modify or terminate
the trust.
(c) A noncharitable irrevocable trust may be terminated upon consent of
all of the beneficiaries if the court concludes that continuance of the
trust is not necessary to achieve any material purpose of the trust. A
noncharitable irrevocable trust may be modified upon consent of all of
the beneficiaries if the court concludes that modification is not
inconsistent with a material purpose of the trust.
(d) A spendthrift provision in the terms of the trust is not presumed to
constitute a material purpose of the trust for purposes of this section.
(e) Upon termination of a trust under subsection (a), (b) or (c) of this
section, the trustee shall distribute the trust property as provided in
the terms of the trust or in default of such terms of the trust as agreed
by all the beneficiaries.
(f) If not all the beneficiaries consent to a proposed modification or
termination of the trust under subsection (a), (b) or (c) of this
section, the modification or termination may be approved by the court if
the court is satisfied that:
(i) If all of the beneficiaries had consented, the trust could have been
modified or terminated under this section; and
(ii) The interests of a beneficiary who does not consent will be
adequately protected.
4-10-413. Modification or termination because of unanticipated
circumstances or inability to administer trust effectively.
(a) The court may modify the administrative or dispositive terms of a
trust or terminate the trust if, because of circumstances not anticipated
by the settlor, modification or termination will further the purposes of
the trust. To the extent practicable, the modification shall be made in
accordance with the settlor's probable intention.
(b) The court may modify the administrative terms of a trust if
continuation of the trust on its existing terms would be impracticable or
wasteful or impair the trust's administration.
(c) Upon termination of a trust under this section, the trustee shall
distribute the trust property in a manner consistent with the purposes of
the trust.
4-10-415. Modification or termination of uneconomic trust.
(a) If the fair market value of a trust is less than one hundred fifty
thousand dollars ($150,000.00), the trustee may terminate the trust by
the following procedure:
(i) The trustee shall determine a plan of distribution that agrees, as
nearly as possible, with the purposes of the trust;
(ii) The trustee shall give written notice to all qualified beneficiaries
of his intent to distribute the assets in accordance with the plan unless
a qualified beneficiary objects in writing within thirty (30) days after
receipt of the notice;
(iii) If no objection is received within thirty (30) days after receipt
of the notice, the trustee shall proceed to distribute the trust assets
in accordance with the plan;
(iv) If the trustee receives a written objection to the plan within
thirty (30) days after receipt of the notice, the trustee shall not
distribute the assets of the trust, but may then petition the court for
an order authorizing distribution in accordance with the plan. The court
shall have plenary authority to approve, modify or reject the trustee's
petition.
(b) The existence of a spendthrift or similar provision shall not affect
the trustee's powers under this section unless the trust instrument
specifically provides that the trustee shall not have the power to
terminate the trust.
(c) This section does not apply to an easement for conservation or
preservation.