If the trust involved in a revocable trust, the Settlor always has the option to modify or revoke the trust.
As such, the Settlor can remove a Trustee if the trust is revocable.
As per section 77 of the Indian Trust Act,1882, a trust may be extinguished or terminated if “its purpose becomes unlawful”.
However, when a public charitable trust is properly and completely constituted, it becomes irrevocable, even though it is voluntary.
Accordingly, there is no provision under the various Public Trusts Acts to legally terminate or dissolve a valid public charitable trust.
However, the assets and liabilities of the trust can be transferred to another charitable trust having similar objects thereby the former trust can be dissolved.
But a revocable trust can be dissolved as per the terms and conditions of the trust deed.
3 Ways to Terminate a Discretionary Trust
- Revoking a Trust. The trust deed may give power to the trustee or settlor of the trust to formally revoke the trust. ...
- Terminating a Trust With the Consent of the Beneficiaries. In certain circumstances, you can dissolve a discretionary trust with the consent of the beneficiaries. ...
- Court Order.
A trust can be cancelled on the following grounds as per Sec. 78 of The Indian Trust Act 1882:
a) Trust can be cancelled at the will of the trustees;
b) Trust can be cancelled if there is provision for cancellation in the deed.
c) If author of a trust creates trust for the purpose of repayment of his debt and if this is nor informed to the creditor author can cancel the trust. n law a settlor is a person who settles property on trust law for the benefit of beneficiaries.
In some legal systems, a settlor is also referred to as a trustor, or occasionally, a grantor or donor.
Where the trust is a testamentary trust, the settlor is usually referred to as the testator. The settlor may also be the trustee of the trust (where he declares that he holds his own property on trusts) or a third party may be the trustee (where he transfers the property to the trustee on trusts).
. Capacity to be a trustee is generally co-extensive with the ability to hold and dispose of a legal or beneficial interest in property.
In practice, special considerations arise only with respect to minors and mentally incapacitated persons.