Can I liquidate my trust fund?

Additional Information:
Is it necessary to present a compelling need to trustees of trust fund in order to liquidate the trust? Trust language indicates “beneficiary will receive (1)all of the income and (2) so much of the principal as the Trustees, in their discretion, determine is necessary to maintain the beneficiary in which she is accustomed, or for her special needs arising from illness, accident or other special circumstances.”

Attorney Answer:
The language you quoted appears to give the trustee considerable discretion when, and to what extent, he/she should use principal as a means of supporting the beneficiary. If it is obvious that dipping into principal is necessary and that anyone serving as trustee would realize that, you have one of two options: (a) try to persuade/negotiate with the trustee; or (b) bring a petition in the probate court to have the trustee removed. The latter is a course of action I would recommend only after the former is exhausted, as such proceedings can be time-consuming, slow and costly. However, courts have removed trustees where they acted in deliberate disregard of the beneficiary’s interests and needs.


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