Trust Law Deviation Principles

Deviation from Trust Instructions

• A court may allow a trustee to deviate from a trust's instructions if the court believes the settlor would have agreed to the change.
• The goal is to replicate the settlor's desired action in the current situation.
• The court reviews the trust document and external evidence.

Who Can Request Deviation?

• A trustee or a beneficiary, not the settlor, can request deviation.

Court Discretion

• The court has discretion to deny deviation even if the trustee has a legitimate reason, as long as it's not an abuse of discretion.

When is Deviation Possible?

• Fulfillment of Trust Purpose: If the trust's stated purpose has been achieved (e.g., funding someone's law school education, and they graduate).

• Legality/Illegality: Deviation is possible if the trust purpose becomes illegal. (e.g., operating a tavern in an area where sales are prohibited.)

• Impossibility: Deviation might be permitted if the purpose is now impossible to fulfil due to unforeseen circumstances. It's important that the reasons for impossibility were not anticipated by the settlor. Deviation should promote trust purposes.

• Administrative Improvements: Modifications to administrative provisions might be necessary to prevent waste or issues in trust management. (e.g., demanding a trustee's weekly accounting).

• Tax Objectives: Deviation is allowed if it is needed to achieve the settlor's intended tax objectives, without contradicting the settlor's intent.

• Termination: The trust can be terminated in whole or in part if its continuation doesn't serve a material purpose AND all beneficiaries consent (directly, through a guardian ad litem, or virtually).

Permitted Deviations

• Changing the trustee.
• Modifying trust terms.
• Allowing/directing trustee actions not explicitly authorized.
• Prohibiting actions explicitly mandated by the settlor.
• Terminating the trust (in whole, or part).