In the matter of the L Trust [2017] JRC 191 (10 November 2017)

In the matter of the L Trust [2017] JRC 191 (10 November 2017)

The 2013 instrument was set aside because the trustee acted on incorrect tax advice, failing to consider relevant tax consequences, and would not have executed the instrument but for that mistake. The mistake was sufficiently serious to justify relief. The 2003 deed's life interest appointment was valid and did not require protector consent, as the protector provisions were only created after the life interest was irrevocably granted.

Citation
[2017] JRC 191
Parties
Original Trustee: Walbrook Trustees (Jersey) Limited; Subsequent Trustee: Vivat Trustees Limited; Current Trustee: Representor; Settlor/beneficiary: Mr C; Beneficiary: Mrs C; Beneficiary: D; Beneficiary: E; Beneficiary: F; Beneficiary: Unborn issue of the settlor
Jurisdiction
Jersey
Judgment Date
10 November 2017
Procedural Posture
Trust Law Application / Judgment on Application to Set Aside Instrument and for Declaration
Outcome
Application granted
Legal Topics
Setting Aside Trustee Decisions, Mistake in Trust Administration, Inheritance Tax Liability, Protector Consent in Trusts
Trusts Taxation Setting Aside Trustee Decisions Mistake in Trust Administration Inheritance Tax Liability Protector Consent in Trusts

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Parties

Walbrook Trustees (Jersey) Limited

Original Trustee

Vivat Trustees Limited

Subsequent Trustee

Representor

Current Trustee

Mr C

Settlor/beneficiary

Mrs C

Beneficiary

D

Beneficiary

E

Beneficiary

F

Beneficiary

Unborn issue of the settlor

Beneficiary

Procedural Posture

Trust Law Application / Judgment on Application to Set Aside Instrument and for Declaration

Legal Issues

  1. 1 Whether the 2013 instrument appointing a joint life interest should be set aside under Articles 47G and 47H of the Trusts (Jersey) Law due to mistake and failure to consider relevant tax consequences
  2. 2 Whether the 2003 deed's appointment of a life interest in favour of the settlor was valid without protector consent

Ratio Decidendi

The 2013 instrument was set aside because the trustee acted on incorrect tax advice, failing to consider relevant tax consequences, and would not have executed the instrument but for that mistake. The mistake was sufficiently serious to justify relief. The 2003 deed's life interest appointment was valid and did not require protector consent, as the protector provisions were only created after the life interest was irrevocably granted.

Court Disposition

Application granted

Orders

  • The 2013 instrument appointing a joint life interest is declared void and of no effect from the date of the instrument under Articles 47G and 47H of the Trusts (Jersey) Law.
  • Declaration that the creation of the life interest in favour of the settlor under the 2003 deed did not require protector consent.