How to Terminate Blind Trusts

By Lisa S. Kramer

A blind trust is a special type of trust where the beneficiaries are unaware of the trust's assets and a designated trustee has full authority to manage the trust, including the purchase, sale and exchange of its assets. Politicians and corporate officers often set up blind trusts to avoid conflicts of interest and public scrutiny. In some states, it is legal for a lottery winner to set up a blind trust so that he can anonymously claim his winnings. A trust creator, called the settlor, can set up his blind trust as either a revocable or irrevocable trust. If the blind trust is set up as a revocable trust, the settlor can terminate the trust by following the revocation procedure set forth in either the trust agreement or state statutes. While revoking an irrevocable trust is not always impossible, the process is difficult as it usually requires court approval and consent of all the trust beneficiaries. Common reasons a settlor may want to terminate his blind trust include a change in financial circumstances, unhappiness with the trust’s beneficiaries or desire to shelter trust assets from tax authorities.

Step 1

Review the trust agreement as well as the state statutes regarding termination of a trust. If the trust agreement contains a provision that specifies how a settlor can terminate the trust, you must follow this procedure. If the trust agreement does not contain such a provision, you must follow the procedures set forth in your state’s statutes.

Step 2

Follow the termination procedure set forth by the trust agreement or your state’s statutes, whichever is applicable.

Protect your loved ones. Start My Estate Plan

Step 3

Obtain a Notice of Revocation of Trust form from your local clerk of courts. This form serves to both inform the trust’s trustee and beneficiaries of the trust’s termination and request the trustee transfer legal title to the trust assets back to the settlor personally.

Step 4

Fill out the Notice of Revocation of Trust form. On this form, you will have to include information such as your name and address, trustee’s name and address, trust beneficiaries’ names and addresses, title of the trust and trust's execution date.

Step 5

Have a licensed notary notarize and sign the form.

Step 6

Make several copies of the completed and notarized Notice of Revocation of Trust form.

Step 7

Serve copies of the Notice of Revocation of Trust on the trust’s trustee and beneficiaries.

Step 8

File the original copy of the Notice of Revocation of Trust at the applicable county recorder's office.

Step 9

Arrange for the trustee to transfer legal title to the trust assets from the trust back to the settlor personally.

Protect your loved ones. Start My Estate Plan
How to Dissolve Inheritance Trust
 

References

Resources

Related articles

Irrevocable Family Trust Laws in Massachusetts

An irrevocable family trust can be effective estate planning tool. When an individual establishes this type of trust, he appoints an individual, known as a trustee, to oversee the administration of the trust. In Massachusetts, specific rules apply to the trustee. State law also sets forth the limited circumstances for the modification or termination of the trust. Understanding the state laws that apply to irrevocable family trusts will help ensure the proper distribution of property held in the trust.

How to Terminate a Living Trust

Any trust that you establish during your lifetime is a "living trust." Living trusts can be revocable, which means that the person creating the trust, known as the "grantor," can terminate it during her lifetime. However, living trusts can also be irrevocable, which means the grantor cannot terminate the trust. In this case, the trustee can terminate the trust, but only in the manner specified in the trust – for example, after all the assets have been distributed.

How to Repudiate a Trust

When a trust is repudiated, the legal entity that holds the trust property is terminated so that others can gain access to the assets. A trust is an agreement created by a person who donates property for select individuals’ benefit. The property is given to a trustee, who manages the property and distributes it to the beneficiaries subject to terms established by the trust’s creator. There are two types of trusts. A living trust is created by a donor while he is alive and a testamentary trust is created by a donor’s will. Trusts are subject to state law, so regulations regarding how the trust can be terminated may vary. Consult state law to determine the exact steps you need to take to repudiate a trust.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

What Is the Power of a Trustee in a Testamentary Trust?

In a testamentary trust, the trustee's function is to serve as guardian and manager of trust assets. The trust document ...

How to Dissolve an Irrevocable Trust

An irrevocable trust is an agreement that manages assets of the trustor, or creator of the trust, for the benefit of ...

Does an Irrevocable Trust Automatically Terminate Upon a Certain Date?

An irrevocable trust is an estate planning tool that the grantor can use for a variety of reasons, including minimizing ...

How to Dissolve a Trust in Court

Setting up a trust allows you to safeguard your funds for certain purposes. For example, you can create a trust that ...

Browse by category
Ready to Begin? GET STARTED