Modification or termination of noncharitable irrevocable trust by consent

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  1. (a)

    1. (1) A noncharitable irrevocable trust may be modified or terminated upon consent of the settlor and all beneficiaries, even if the modification or termination is inconsistent with a material purpose of the trust.

    2. (2) A settlor's power to consent to a trust's modification or termination may be exercised by:

      1. (A) an agent under a power of attorney only to the extent expressly authorized by the power of attorney or the terms of the trust;

      2. (B) the settlor's conservator with the approval of the court supervising the conservatorship if an agent is not so authorized; or

      3. (C) the settlor's guardian with the approval of the court supervising the guardianship if an agent is not so authorized and a conservator has not been appointed.

  2. (b) A noncharitable irrevocable trust may be:

    1. (1) terminated upon consent of all of the beneficiaries if a court concludes that continuance of the trust is not necessary to achieve any material purpose of the trust; or

    2. (2) modified upon consent of all of the beneficiaries if a court concludes that modification is not inconsistent with a material purpose of the trust.

  3. (c) A spendthrift provision in the terms of the trust is presumed to constitute a material purpose of the trust.

  4. (d) Upon termination of a trust under subsection (a) or (b), the trustee shall distribute the trust property as agreed by the beneficiaries.

  5. (e) If not all of the beneficiaries consent to a proposed modification or termination of the trust under subsection (a) or (b), the modification or termination may be approved by a court if the court is satisfied that:

    1. (1) if all of the beneficiaries had consented, the trust could have been modified or terminated under this section; and

    2. (2) the interests of a beneficiary who does not consent will be adequately protected.


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