In the matter of the Y Trust [2015] JRC 059 (25 March 2015)

In the matter of the Y Trust [2015] JRC 059 (25 March 2015)

The court accepted E's surrender of discretion due to conflict of interest and directed exercise of powers to close the class of beneficiaries, vary the trust deed, and declare only adult beneficiaries as non-excluded, enabling termination of the trust and distribution of assets per the divorce settlement agreement, finding the arrangements were for the benefit of the mother and children and did not constitute a fraud on the power.

Citation
[2015] JRC 059
Parties
Representor/trustee: E; Second Respondent/beneficiary: the mother; Beneficiary/excluded Person: the father; Third Respondents/beneficiaries: the children; Fifth Respondent/beneficiary: the sister; Sixth Respondents/excluded Class: the sister's children; Represented Parties: minor grandchildren and unborn beneficiaries
Jurisdiction
Jersey
Judgment Date
25 March 2015
Procedural Posture
Trust Law Application / Final Judgment on Trustee's Surrender of Discretion
Outcome
Application granted; trustee's surrender of discretion accepted; court directed exercise of specified powers.
Legal Topics
Surrender of Trustee Discretion, Termination of Trust, Distribution of Trust Assets, Fraud on a Power, Exclusion of Beneficiaries
Trusts Family Law Surrender of Trustee Discretion Termination of Trust Distribution of Trust Assets Fraud on a Power Exclusion of Beneficiaries

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Parties

E

Representor/trustee

the mother

Second Respondent/beneficiary

the father

Beneficiary/excluded Person

the children

Third Respondents/beneficiaries

the sister

Fifth Respondent/beneficiary

the sister's children

Sixth Respondents/excluded Class

minor grandchildren and unborn beneficiaries

Represented Parties

Procedural Posture

Trust Law Application / Final Judgment on Trustee's Surrender of Discretion

Legal Issues

  1. 1 Whether trustee E may surrender discretion to the court regarding exercise of specific powers under the trust deed
  2. 2 Whether closing the class of beneficiaries and distribution of assets constitutes a fraud on the power
  3. 3 Whether exclusion of certain beneficiaries is reasonable and lawful

Ratio Decidendi

The court accepted E's surrender of discretion due to conflict of interest and directed exercise of powers to close the class of beneficiaries, vary the trust deed, and declare only adult beneficiaries as non-excluded, enabling termination of the trust and distribution of assets per the divorce settlement agreement, finding the arrangements were for the benefit of the mother and children and did not constitute a fraud on the power.

Court Disposition

Application granted; trustee's surrender of discretion accepted; court directed exercise of specified powers.

Orders

  • Trustee E to exercise powers to close class of beneficiaries, vary trust deed, and declare only adult beneficiaries as non-excluded.
  • Trust terminated and assets distributed per divorce settlement agreement after expiry of notice to Guardian.