Termination of trusts—Scotland

Testamentary trusts

Will trusts (or testamentary trusts) are capable of being revoked up until they come into effect on death. In simple terms, a Will (whether containing trust provisions or not) is superseded by a more recent testamentary writing. Whether that is technically a revocation of trust is another matter.

However, a person may bind themselves during their lifetime to bequeath their estate in a particular way, and if they do so, the bequest will be irrevocable in consequence of their obligation.

Trusts for administration

A duly constituted and completed inter vivos trust can be revoked by the granter if it has been set up purely for the management of their own affairs. Trusts of this nature are known as ‘trusts for administration’.

A trust may be revoked by a settlor or be deemed to be capable of revocation (by application of creditors) where the settlor was either insolvent when the trust was formed or where the settlement had the consequence of rendering the settlor insolvent.

If a person wishes to put their estate beyond the reach of their creditors, the only way in which they can do so is to divest themself of it in such a manner as to place it irrevocably beyond their own reach.

Lifetime settlements

Revocation by a settlor of a lifetime settlement (or inter