A living trust can be terminated effectively on the following manners:
1. Expiry of Trust Period
For instance, a parent sets up a trust to bequeath a sum of cash to his son upon him reaching the age of 30. Once his son hits 30, the trustee shall distribute the sum of money to his son and with that, ending the trust.
Alternatively, an individual can form a trust where its period is for 3 years. Thus, the trust shall end upon the expiry of 3 years.
2. Maximum Trust Period
A private trust (testamentary and living trust) shall not be set up indefinitely. As of today, the maximum fixed period of a trust is set to be 80 years in Malaysia.
3. Complete Distribution of Trust Assets
A living trust can be terminated in advance prior to its trust period if the estates had been fully distributed.
For instance, Mr. A set up a living trust for a period of 10 years. Subsequently, in the 8th year, the trustee had distributed all the trust’s assets to the beneficiaries in full. Hence, Mr. A’s living trust shall then be terminated effectively.
