Creating a Family Trust? Are You Sure It Reflects Your True Intentions?

20th April 2021 By

Rather than giving money to your children directly, you may choose for a variety of good reasons to provide for them by way of a discretionary trust. Such a step is a serious matter, however, and as a High Court case underlined, it is extremely difficult to alter a trust deed after it has been formally executed.

The case concerned a father who wished to make provision for his three children from an inheritance of about £450,000 that he had received from his mother. He signed a deed that varied the terms of his mother’s will. As drafted, the deed placed all of his inheritance into a trust for the benefit of his children. The deed having been duly executed, he could neither cancel nor amend it.

The father launched proceedings seeking rectification of the deed on the basis that it did not reflect his true wishes. He said that his intention was that he and his wife would be included with their children as beneficiaries of the trust.

Ruling on the matter, the Court found that his instructions concerning the deed had not been correctly recorded. As a result, his name and that of his wife had been omitted from the list of beneficiaries. Regardless of where responsibility, if any, for that omission lay, the deed did not implement his intentions.

The Court found that the father wished to earmark £100,000 for the benefit of each of the three children and the remaining £150,000 for the benefit of himself and his wife. He wanted to create a discretionary trust so that the children’s access to funds would be controlled by trustees. One of the children was disabled and the trust was also designed to safeguard his access to state benefits. The Court exercised its discretion to rectify the deed so that it gave effect to those intentions.

Source: Concious

Latest News

British Child's Inheritance of Italian Property Creates Legal Quandary

10th May, 2021 By

Where a British child inherits foreign property, tricky legal issues can arise. However, as one case showed, English judges are well able to deal with such difficulties by applying the overriding principle that the child's welfare is always paramount. The case involved an 11-year-old boy whose father died without making a will. Under Italian law, he automatically inherited a 25 per cent share in an Italian holiday home owned by his parents. His mother, who held 75 per cent of the property, wished to sell it at a good price...

Defamed on Social Media? You Don't Have to Put Up With It

7th May, 2021 By

Wounding statements that can have a devastating impact on your professional and personal life take moments to type but can spread like wildfire on the internet. As a High Court case concerning two sports journalists showed, however, lawyers can move fast to ensure your reputation is vindicated. A journalist took legal action after a number of posts appeared on social media. They were the work of a rival sports writer. They clearly referred to him and, amongst other things, accused him of being a shameless liar and cheat who had...

Husband in £64 Million Divorce Case Claims COVID-19 Hardship

4th May, 2021 By

COVID-19 has without doubt drastically affected the fortunes of some very wealthy people. As a High Court ruling in a big money divorce case showed, however, the pandemic does not by itself amount to a good reason for failing to meet legal and financial obligations. The case concerned an extraordinarily wealthy businessman who was ordered to pay his ex-wife a total of £64 million, comprising the mortgage-free matrimonial home, which was worth £15 million, and a lump sum of £49 million. The order, amongst other things, set deadlines by which...

Confronting Mortality – Professional Advice Helps Produce Order from Chaos

28th April, 2021 By

Confronting mortality is never easy and many people put off making decisions critical to their own future, and that of their loved ones, until after the onset of serious illness or old age. Such a course involves serious legal risks but, as a High Court case showed, they can be effectively offset by taking professional advice. The case concerned a woman who died at the age of 60 after enduring many years of ill health, including two strokes. Four years previously, she had purchased her home at a discounted price...