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RayAnswers
RayAnswers, Attorney
Category: Estate Law
Satisfied Customers: 40093
Experience:  Texas lawyer for 30 years in Estate law
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I live in New York State and have an Irrevocable Trust that

Customer Question

I live in New York State and have an Irrevocable Trust that I had created in 2012 for a company sponsored life insurance policy. I retired from the company in 2015 and the life insurance policy was terminated, so there is no longer any reason to maintain the trust as there is no longer an asset. How do I dissolve the trust so as not to have to continue to file with my federal and state income tax returns?
Submitted: 1 year ago.
Category: Estate Law
Expert:  RayAnswers replied 1 year ago.
Hi and welcome to JA.Ray here to help you today. You would need to petition the probate court here in NY to terminate the trust.If you the trustor and the beneficiaries agree it is not a problem to do so.The court issues an order terminating the trust.You are going to need a local trust lawyer to file the petition and get everyone to agree and sign off. An irrevocable trust cannot be modified or revoked without a court order, and usually requires the consent of the settlor, if still alive, and the beneficiaries. If the settlor and the beneficiaries agree to modify or terminate the trust, then the trustee has no standing to object. So here it can be done by petition and court order closing the trust.I appreciate the chance to help you today.
Expert:  RayAnswers replied 1 year ago.
010 New York CodeEPT - Estates, Powers & TrustsArticle 7 - TRUSTSPart 1 - (7-1.1 - 7-1.19) RULES GOVERNING TRUSTS7-1.19 - Application for termination of uneconomical trust.§ 7-1.19 Application for termination of uneconomical trust (a) Notwithstanding sections 7-1.5 and 7-2.4 of this article or any other contrary provision of law: (1) Any trustee or beneficiary of a lifetime or testamentary express trust (other than a wholly charitable trust) may, by application to the surrogate's court having jurisdiction over the trust, seek a termination of such trust when the expense of administering the trust is uneconomical. (2) If, upon such application, the court finds that continuation of the trust is economically impracticable, that the express terms of the disposing instrument do not prohibit its early termination, and that such termination would not defeat the specified purpose of the trust and would be in the best interests of the beneficiaries, the court may make an order or decree terminating the trust and directing the distribution of the trust assets to and among those beneficiaries who at the time are entitled (or entitled in the discretion of the trustee) to the income and/or principal of the trust and those beneficiaries who would be entitled (or entitled in the discretion of the trustee) to the income and/or principal of the trust if it were to terminate immediately before such order or decree. The distribution of the trust assets shall be made in such manner, proportions and shares as in the judgment of the court will effectuate the intention of the creator. (b) Notice of the application shall be given to such persons and at such time and in such manner as the court, in its discretion, may direct. (c) If the application or the possibility of the application of this section to any trust would reduce or eliminate a charitable deduction otherwise available to any person under the income tax, gift tax, estate tax or generation-skipping transfer tax provisions of the United States Internal Revenue Code, or the laws of any state of the United States or of the District of Columbia, this section shall not apply to such trust. (d) This section shall not apply to a supplemental needs trust which conforms to the provisions of section 7-1.12 of this part.
Expert:  RayAnswers replied 1 year ago.
Thanks again for letting me help you today. Trust lawyer to file your application here. http://www.nysba.org/lawyerreferral/
Expert:  RayAnswers replied 1 year ago.
I appreciate the chance to help you today.Thanks again.
Expert:  RayAnswers replied 1 year ago.
If you can positive rate it is always much appreciated.