Trusts are useful tools for those planning legacies in part because they give people control over their property even after they die. In a standard inheritance, the beneficiaries assume control over an asset as soon as the estate transfers it to them. When you use a trust instead of a will, the trustee who administers the trust is the one who has the ultimate control over the distribution and use of the assets that you leave behind when you die.
A well-funded and carefully planned trust could potentially provide for you and your loved ones for years or even multiple generations. When you create the trust, one of the things you will have to plan for is how you want to end the trust. What are the typical ways to put an end to a trust established as part of an estate plan?
With the trust reaching a specific goal
The person creating the trust can plan for the trust to terminate at a specific date, after a certain amount of time beyond their date of death or when either the trust or its beneficiaries reach specific milestones.
With the diminishment of trust assets
Arguably the most common and straightforward way for a trust to end is when the assets that fund it have all serve their purpose. Once a trustee distributive property to beneficiaries and there are no assets remaining, the trust ends then.
With the remaining assets going to a final beneficiary
Some people create a trust to take care of their spouse, children or other family members. When their loved ones eventually die, they can plan ahead to have the trustee liquidate the remaining assets and distribute them to another individual or possibly a charity.
Determining the right way to end a trust can be as important as how you structure and fund the trust. Careful estate planning can help your trust achieve the goals you intend.