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City of Klamath Falls - professorbeyer.com

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Party Alterations
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1. By the Settlor -- § 112.051
Presumption = Settlor may revoke, modify, amend, etc.Settlor can make trust irrevocable by express language. Why?Tax benefitsBeneficiary protectionCreditor protection
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1. By the Settlor -- § 112.051
Revocation MethodsIn writing, if trust created in writing.Sanderson– p. 630 (allowed revocation language to be in a will).Follow method settlor specified in the trust.
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2. By the Trustee
Generally, no power to modify.Possible situations:Settlor granted power in the trust.Division or combination of trusts on identical terms -- § 112.057Non-judicial cy pres -- § 113.026Decanting -- §§ 112.071-.087
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3. By Trustee and Beneficiaries Acting Together
Merger -- § 112.034But, no merger of spendthrift trust unless settlor is the beneficiary.
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4. By Beneficiaries
General U.S. Rule = Allowed as long as nomaterialtrust purpose remained unfulfilled (Claflinrule).
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4. By Beneficiaries
Texas underFrost Nat’l Bank v. Newton(Tex. 1977) = Allowed only ifallpurposes satisfied.Texas under § 112.054(a)(5) if:Obtain court approval,Change not inconsistent with material purpose, andAll beneficiaries agree or are deemed to have agreed.
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5. Settlor and All Beneficiaries
Musick v. Reynolds– p. 634, 637“[I]f a settlor of a trust is alive and all of the beneficiaries of an irrevocable spendthrift trust consent * * *, the settlor and all beneficiaries may consent to a modification or termination of the trust.”What problem could this holding cause?
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6. Family Settlements
Favored by courts on public policy grounds.But, courts make certain controversy is genuine.
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City of Klamath Falls - professorbeyer.com