Winding up a Trust - When and how is it done?
- trust is no longer needed, or the purpose of the trust has been fulfilled;
- trustee no longer holds any assets;
- beneficiaries are old enough to take care of their own assets;
- administrative costs of running the trust are too high; or.
- a Court orders the trust be wound up.
When should a trust be terminated?
Further, a trust will be considered as terminated when all the assets have been distributed except for a reasonable amount which is set aside in good faith for the payment of unascertained or contingent liabilities and expenses (not including a claim by a beneficiary in the capacity of beneficiary).
Should I wind up my trust?
A change in personal circumstances may diminish the need for a family trust and the on-going maintenance it requires may seem like an unnecessary expense. However, winding up your trust may expose your assets to risk and the protection gained from establishing the trust in the first place may be lost.
