(a) If the court finds that the settlor, the trustee and all beneficiaries consent to the modification or termination of a noncharitable irrevocable trust, the court may approve 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 trust's modification or termination may be exercised by (1) 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 (2) the settlor's conservator with the approval of the court supervising the conservatorship. This subsection does not apply to irrevocable trusts created before, or revocable trusts that become irrevocable before, January 1, 2020.
(b) A noncharitable irrevocable trust may be (1) 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; and (2) modified upon consent of all of the beneficiaries if the court concludes that modification is not inconsistent with a material purpose of the trust.
(c) A spendthrift provision in the terms of the trust is not presumed to constitute a material purpose of the trust.
(d) Upon termination of a trust under subsection (a) or (b) of this section, the trustee shall distribute the trust property as agreed by the beneficiaries and approved by the court.
(e) If not all of the beneficiaries consent to a proposed modification or termination of the trust under subsection (a) or (b) of this section, the modification or termination may be approved by the court if the court is satisfied that:
(1) If all of the beneficiaries had consented, the trust could have been modified or terminated under this section; and
(2) The interests of a beneficiary who does not consent will be adequately protected.
(f) Notwithstanding the provisions of this section, the court may not terminate an irrevocable trust established pursuant to 42 USC 1396p(d)(4)(A) or (C), as amended from time to time. The court may approve a proposed modification of the terms of such trust to ensure compliance with the requirements of federal law or to modify any individual's contingent beneficial interest that is available only after repayment to this state or another state for (1) medical assistance provided; and (2) all claims for which this state would have claims against the estate of the deceased beneficiary that have not previously been paid or reimbursed.
(P.A. 19-137, S. 31.)
History: P.A. 19-137 effective January 1, 2020.