(a) During the settlor‘s lifetime, a noncharitable irrevocable trust may be modified or terminated by the trustee upon consent of all qualified beneficiaries, even if the modification or termination is inconsistent with a material purpose of the trust if the settlor does not object to the proposed modification or termination. The trustee shall notify the settlor of the proposed modification or termination not less than sixty (60) days before initiating the modification or termination. The notice of modification or termination must include:

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Terms Used In Tennessee Code 35-15-411

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Beneficiary: means a person that has a present or future beneficial interest in a trust, vested or contingent. See Tennessee Code 35-15-103
  • Continuance: Putting off of a hearing ot trial until a later time.
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Irrevocable trust: A trust arrangement that cannot be revoked, rescinded, or repealed by the grantor.
  • Person: means an individual. See Tennessee Code 35-15-103
  • Property: means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein. See Tennessee Code 35-15-103
  • Settlor: means a person, including a testator, who creates, or contributes property to, a trust. See Tennessee Code 35-15-103
  • State: means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. See Tennessee Code 35-15-103
  • Trust instrument: means an instrument executed by the settlor that contains terms of the trust, including any amendments thereto. See Tennessee Code 35-15-103
  • Trustee: A person or institution holding and administering property in trust.
  • Trustee: includes an original, additional, and successor trustee, and a cotrustee. See Tennessee Code 35-15-103
(1) An explanation of the reasons for the proposed modification or termination;
(2) The date on which the proposed modification or termination is anticipated to occur; and
(3) The date, not less than sixty (60) days after the giving of the notice, by which the settlor must notify the trustee of an objection to the proposed modification or termination.
(b) Following the settlor’s death, a noncharitable irrevocable trust may be terminated upon the unanimous agreement of the trustee and all qualified beneficiaries if such termination does not violate a material purpose of the trust. Additionally, following the settlor’s death, a noncharitable irrevocable trust may be terminated upon consent of all of the qualified beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any material purpose of the trust.
(c) Following the settlor’s death, a noncharitable irrevocable trust may be modified or terminated upon the unanimous agreement of the trustee and all qualified beneficiaries if such modification or termination does not violate a material purpose of the trust. Additionally, a noncharitable irrevocable trust may be modified or terminated upon consent of all of the qualified beneficiaries if the court concludes that modification or termination is not inconsistent with a material purpose of the trust.
(d) Modification of a trust as authorized in this section is not prohibited by a spendthrift clause or by a provision in the trust instrument that prohibits amendment or revocation of the trust.
(e) An agreement to modify a trust as authorized by this section is binding on a beneficiary whose interest is represented by another person under part 3 of this chapter.
(f) Upon termination of a trust under subsection (a) or (b), the trustee shall distribute the trust property as agreed by the qualified beneficiaries.
(g) If not all of the qualified beneficiaries consent to a proposed modification or termination of the trust under subsection (a), (b), or (c), as applicable, the modification or termination may be approved by the court if the court is satisfied that:

(1) If all of the qualified beneficiaries had consented, the trust could have been modified or terminated under this section; and
(2) The interests of a qualified beneficiary who does not consent will be adequately protected.
(h) As used in this section, “noncharitable irrevocable trust” refers to a trust that is not revocable by the settlor with respect to which:

(1) No federal or state income, gift, estate, or inheritance tax charitable deduction was allowed upon transfers to the trust; and
(2) The value of all interests in the trust owned by charitable organizations does not exceed five percent (5%) of the value of the trust.
(i) Notwithstanding subsection (a), (b), or (c), the trustee may seek court approval of a modification or termination.
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