TSEM6354 - Legal background to trusts and estates: trust ends because of fraud or bankruptcy

Fraud

A trust can be nullified, if it was made with a fraudulent intent. For example, a settlor may have set up a trust to stop a creditor recovering a debt.

Bankruptcy

Under the Bankruptcy Act a settlement may become voidable upon the subsequent bankruptcy of the settlor. Whether it is voided (wholly or partially) depends upon the circumstances.