When people create irrevocable trusts to control how beneficiaries will receive assets from the trust, the beneficiaries do not always like it. They would often prefer to have the assets outright and control them for themselves. This was the case recently in Florida.
A settlor created an irrevocable trust and funded it with assets totaling $3 million. His son was named as the beneficiary and entitled to interest income from the trust for life. Three educational institutions were named as the remainder beneficiaries. The son and the remainder beneficiaries sued the trustee to get the trust commuted, so they could all receive their share of the trust assets as the Wills, Trusts & Estates Prof Blog discusses in "Court Stops Beneficiaries From Commuting Trust."
Florida law provides three different reasons for permitting an irrevocable trust to be commuted or modified by the court, which is similar to most state laws on the subject. The first is that the purposes for which the trust was created have been fulfilled or are otherwise a problem. For example, the purposes may be impossible to fulfill or illegal. The second is that unanticipated circumstances have made complying with the terms of the trust, contrary to the purposes of the trust. Finally, the material purpose for which the trust was created no longer exists.
In this case, the trial court ruled on a summary judgment for the son.
However, on appeal, the ruling was reversed, since the court determined that the settlor's intent was the most important thing and that the trust could not be dissolved merely because the beneficiaries wanted to do so.
Reference: Wills, Trusts & Estates Prof Blog (June 3, 2018) "Court Stops Beneficiaries From Commuting Trust."