A court may terminate a trust if which set of conditions are satisfied?

• A. Continuation of the trust is economically impracticable
• B. The express terms of the disposing instrument do not prohibit its early termination
• C. Such termination would not defeat the specified purpose of the trust and would be in the best interests of the beneficiaries
• D. All three conditions are satisfied

Answer: (D)

When a court can terminate a trust, it does so only if there’s a practical basis that preserves the beneficiaries’ interests and honors the trust’s aims. The trust may be terminated if continuing it is economically impracticable, the express terms of the instrument do not prohibit termination, and such termination would not defeat the trust’s specified purpose and would be in the best interests of the beneficiaries. Each element matters: impracticability prevents wasteful or impossible ongoing administration; the instrument’s prohibition would block termination if the settlor intended the trust to be irrevocable; and ensuring the termination wouldn’t undermine the trust’s purpose keeps the overall intent and benefit to beneficiaries intact. When all three conditions are met, termination is permissible, which is why all three must be satisfied.