Summary of Underhill v. United States Trust Co., 227 Ky. 444, 13 S.W.2d 502 (1929)
Facts: Evie Underhill, executed a deed of trust to U.S. Trust Co. conveying a considerable real estate for the purpose of later devise to later issues. The trustee was given power to sell and convey and reinvest the proceeds in its discretion, subtract its commission, and pay the net income to the parties. Ms. Underhill and her beneficiary wanted to terminate the trust.
Issue: Whether the settlor/trustor has the power to join w/ a beneficiary to alter or revoke the trust instrument where that instrument provides discretion to the trustee and other beneficiaries are
Holding: It is not within the power of the court or the trustor and beneficiary to alter or revoke the instrument b/c by the express terms of the instrument others have a contingent interest in it.
Procedure: Chancellor held that under the conditions of the trust deed, neither the settlor nor the ct had the power to terminate it. Affirmed.
Rule: A trust once created and accepted without reservation of power can only be revoked by the full consent of all parties in interest, if any of the parties are not yet in being, it cannot be revoked at all.
Rationale: Where the trustor has provided for the mode of revocation, and that mode has not been met or followed, the trustor is restrained from revoking the trust. Ms. Underhill is restrained by the rule that it is essential that the mode she implemented by followed.
Where there are remainder or contingent interests which cannot be determined until the happening of some event, the trust cannot be terminated, nor can the share of either one of the trust beneficiaries be paid over to him. If a trust is created for the life of one, it cannot be terminated before his death. One beneficiary cannot demand a conveyance to himself in contravention to the agreement under which the trust was created.
A voluntary trust is a contract btwn settlor and trustee, consideration being the benefits contemplated and resulting, thus it is subject to mutuality of consent to terminate.