Overview of Trusts
In simple terms, a trust is a legal relationship in which one person, known as the trustee, holds property for the benefit of another person, known as the beneficiary. It is the job of an appointed trustee to manage and allocate trust property, referred to as the corpus, to the beneficiaries in accordance with the wishes of the settlor as expressed by the trust's terms. A trust can be either irrevocable or revocable. The settlor has no power to terminate an irrevocable trust, but may terminate a revocable trust at any time.
In Missouri, a trust may terminate by its terms. An example might be setting up a trust for the benefit of minor children until they reach 18. Upon that date, the trust would end and the remaining assets would be distributed to the beneficiaries based on the settlor's instructions. A trust may also be terminated in Missouri if a beneficiary can show that its purpose is either impossible to achieve, illegal or contrary to public policy. For example, a trust that is established for the benefit of a couple's children despite evidence that the parents are medically unable to have children might be terminated for impossibility. Likewise, a trust set up to pay for an illicit drug habit could be terminated on the grounds of both illegality and being contrary to public policy.
Irrevocable trusts established for noncharitible purposes may be terminated by consent in Missouri. This requires unanimous agreement of the beneficiaries and the settlor, but does not require the consent of the court. In fact, a trust may be terminated by consent even if it conflicts with the material purpose of the trust. An example might be breaking a trust that was set up to support your education at a time when you are currently enrolled in school. The remaining assets of a trust dissolved in this manner are distributed by any method agreed upon by the beneficiaries.
If you believe there are insufficient assets in a trust to justify the administrative costs, you may request that the trustee terminate the trust on the grounds that it is uneconomic. To qualify in Missouri, the trust must be valued at less than $100,000 and notice must be provided to all beneficiaries. Any remaining funds will be distributed in a manner consistent with the purpose of the trust.