pacitated to give legal consent, it would not be possible to obtain the necessary unanimous consent. A trust for the benefit of a married woman is usually considered to have been created for the purpose of protecting her property from her husband or his creditors. In case of the death of the husband, the courts have, on application of the woman, decreed a termination of the trust.2 § 466. Trusts That Cannot Be Terminated by Consent Many trusts are formed expressly to prevent the cestui que trust from selling or disposing of the trust property. In such case, to allow the trustee and the beneficiary to agree to terminate the trust would defeat its primary object. In other cases a trust is created to provide a safe income for a wife or a daughter unskilled in managing property. Here again, the trust cannot be dissolved by agreement of the parties, even though of age. Generally, if the termination of the trust would defeat the intention of the creator of the trust, it will not be dissolved by consent of the trustee and the beneficiaries, even though all the beneficiaries are of age. § 467. Formalities of Termination Executors and administrators, when they have settled the estate, paid all lawful debts, satisfied all legacies, and had their accounts approved, will be discharged by the court. If they are also trustees, the trust may run on for years after the estate has been settled. When the trust has been fulfilled, it would be the duty of the trustees to transfer or convey the property to those entitled to it according to the terms of the trust instrument. It is usual for trustees, on making this final distribution, to secure a formal release of all claims from all who receive any of the property and are competent to consent.3 Perry on Trusts, 920. If there are any doubts as to the rights of any party to receive, or if there are rival claimants, or if there is any possibility of trouble in the future, the trustees may require a bond of indemnity from the beneficiaries or may decline to act without a decree of court. If any are not of age, they cannot consent, and cannot release nor give a bond of indemnity. In such case, the trustee can readily secure evidence of the transfer and may be willing to risk payment, or he may refuse to act save on an order of court. A receipt and a release are not conclusive, but they are prima facie evidence and require strong proof to set them aside. A decree of court directing a particular distribution relieves the trustee from all responsibility and he would need no release, but prior to the decree the trustee must have made known to the court all facts bearing on the situation. A decree based on misinformation could be set aside. If trustees pay over money to the wrong person, the right person can later make them pay it again. A trustee is not required to take any risk, hence in any case that is doubtful he may refuse to act until he has a bond to indemnify him in case of trouble, or he may decline to do anything until compelled by decree of court. A trustee may pay money to the agent of the real party in interest. Before doing so, he must satisfy himself by some written evidence signed by the parties, that the agent is authorized to receive it. If the cestui que trust were abroad he could, by power of attorney, authorize an agent here to collect for him. This power of attorney would be revoked by the death of the cestui que trust. The costs of winding up a trust and distributing the money, and all expenses for documents, deeds, and other papers must be paid from the trust fund.* Perry on Trusts, § 933. REVIEW QUESTIONS 1. When is a trustee naturally discharged? Under what other circumstances would a trustee be discharged? 2. When is a trust fulfilled? What evidence should a trustee have of the fulfilment of his trust? 3. When will. courts of equity refuse to terminate a trust though all interested consent? If a trust were made for a married woman and her husband died, could the trust be terminated? 4. A testamentary trust provided that the income be paid to a widow during her life, and on her death the principal be divided among her children. If the children all were of age, could they ask the widow to terminate the trust by consent? Give reason for your answer. 5. What must be done before an executor is discharged? If an executor were also a trustee, what would he have to do? What should be secured as evidence of final distribution? If there should be conflicting claims for any part of the estate, what should the trustee do? In case of minors, what may a trustee do? What is the effect of a decree of court? If a trustee by mistake pays the wrong party, what is the result? |