Also known as:unfulfilled material purposes · material purpose
Written by attorneys · grounded in primary & secondary sources — see below
A core objective that motivated creation of a trust and that has not yet been realized. The presence of such an objective prevents a court from approving termination or modification of a noncharitable irrevocable trust on the sole basis of unanimous beneficiary consent.
Sources & Authorities· 6 primary sources
Select any source to read its text and confirm it supports the definition.
Uniform Acts
Restatements
Course Outlines
How it applies
Common Examples
3
Farm Sale Blocked by Retention Purpose
Usman Uddin created an irrevocable trust holding the family farm and directed that the land remain in agricultural use for his grandchildren. After his death the adult grandchildren petition the court to terminate the trust and sell the property to a developer. The court denies the petition because the explicit direction to keep the farm in agricultural use constitutes an unfulfilled material purpose that continuation of the trust is still necessary to achieve.
Power Exercise Upheld Despite Missing Reference
Ugo Ucelli holds a power of appointment that the donor required be exercised only by an instrument making specific reference to the power. Ugo executes a will that appoints the property without using the required reference language. The court validates the appointment because Ugo knew of and intended to exercise the power and the omission did not impair any material purpose the donor had in imposing the formal requirement.
Trustee Removal Denied to Preserve Family Control
Ulf Ulfsson serves as trustee of an irrevocable trust that holds controlling shares in a family manufacturing company. All qualified beneficiaries petition for his removal after the company suffers losses. The court refuses removal because keeping the shares under the current trustee's management continues to serve the settlor's material purpose of preserving unified family control, and removal would be inconsistent with that purpose.
Common questions
Frequently Asked
5
When does unanimous beneficiary consent allow termination of a noncharitable irrevocable trust?+
A court may terminate the trust if all beneficiaries consent and the court concludes that continuance is not necessary to achieve any material purpose of the trust. The material-purpose inquiry focuses on core objectives the settlor built into the trust instrument, such as preserving a specific asset for a designated use or protecting younger beneficiaries until a stated age.
Supporting sources
Does a spendthrift clause automatically constitute a material purpose?
No. Under the Uniform Trust Code a spendthrift provision is not presumed to embody a material purpose. The court must examine the trust instrument and surrounding circumstances to determine whether the settlor intended the clause to serve as a core protective objective that would be frustrated by termination.
Supporting sources
What happens when not all beneficiaries consent to termination?+
The court may still approve termination if two conditions are met. First, the court must find that the trust could have been terminated had every beneficiary consented. Second, the court must ensure that the interests of any nonconsenting beneficiary will be adequately protected through substitute arrangements or protective covenants.
Supporting sources
How does the court determine whether a retention directive reflects a material purpose?+
The court looks to the language of the trust instrument and the circumstances surrounding its creation. Explicit directions to retain an asset until a beneficiary reaches a certain age or to keep property in family hands are strong evidence of a material purpose. Changed market conditions alone do not erase that purpose unless the instrument itself indicates the directive was merely administrative.
Supporting sources
Can a court terminate a trust whose value is too small to justify administration costs?+
Yes. Separate from the material-purpose rule, the Uniform Trust Code permits termination when the trust corpus is insufficient to cover reasonable administrative expenses. The court may order termination even if a material purpose once existed, provided continued administration would steadily erode the principal without net benefit to any beneficiary.
Supporting sources
Trusts and Estates Trusts and Future InterestsTrusts · ModificationUBEFoundational