THE DDD 1976 SETTLEMENT, DDD 1979 SETTLEMENT and DDD 2005 SETTLEMENT [Royal Ct]

JurisdictionJersey
CourtRoyal Court
Judge(William Bailhache, Deputy Bailiff and Jurats Le Breton and Nicolle)
Judgment Date28 December 2011
Date28 December 2011
ROYAL COURT
(William Bailhache, Deputy Bailiff and Jurats Le Breton and Nicolle)

Trusts—variation—"for the benefit of"

The representors were beneficiaries of three settlements established by C, who had been excluded from benefit to avoid significant estate tax liabilities in Singapore. Following the abolition of that estate tax, the adult beneficiaries of the settlements agreed that C, who was in her 90s and financially independent, should no longer be an excluded person. They sought the court's sanction, under art. 47 of the Trusts (Jersey) Law 1984, of the arrangements to revoke the deeds of exclusion by which C had been irrevocably excluded by the trustees from benefit under two of the settlements and to remove the settlor as a member of the excluded class of beneficiaries under the third settlement.

Article 47 of the Trusts Law provided that the court could not approve on behalf of unborn beneficiaries an arrangement revoking or varying the terms of a trust unless it appeared to be for their benefit. The representor submitted that there were three benefits in the present case: (a) there was no good reason why the settlor should be treated differently from the other members of the family; (b) the adult beneficiaries owed her a moral obligation to enable her to be brought back into the class of potential beneficiaries; and (c) there were potential tax benefits for all the beneficiaries.

Held: (1) The court had power under art. 47 of the Trusts Law to make the orders sought. Under that article the court could vary or revoke all or any of the terms of a trust, including terms that had arisen from an irrevocable exercise of power by the trustee. A trustee who applied for the revocation of a trust provision that had arisen as a result of an irrevocable exercise of power by him should, however, expect to have the motivation for such a request very closely examined by the court. The second power conferred on the court by art. 47(1), namely to enlarge the powers of the trustee, did not apply in the present case because the power was limited to what was necessary for the purposes of managing or administering the trust property. A power to add beneficiaries was not a power of managing or administering trust property but was closer to a dispositive power and was a substantive provision.

(2) The arrangement would be approved because the potential to avoid substantial tax liabilities was in the best interests of the unborn beneficiaries. Tax planning...

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3 cases
  • (1) A(Representors) v (1) K
    • Jersey
    • Royal Court
    • 30 June 2017
    ...of N and N [1999] JLR 86. In the matter of Douglas [2000] JLR 73. In the matter of the DDD (1976) Settlement and other Settlements [2012] (1) JLR Note 8. In the matter of Quorum Trustees Limited 2002/61. X Trustees Limited v W and A [2015] JRC 136. Goulding and another v James and another ......
  • IQ EQ (Jersey) Ltd v R
    • Jersey
    • Royal Court
    • 14 May 2021
    ...Law 1984. Re Clore's Settlement Trusts [1966] 1 WLR 955. X and Another v A and Others [2006] 1 WLR 741. In re DDD 1976 Settlement [2012] (1) JLR Note 8. In the Matter of the T Settlement [2002] JLR 204. Re Hampden Trust Trusts [2001] WTLR 195. Re Esteem [2001] JLR 540. Pilkington v Inland......
  • THE REPRESENTATION of CPM NEAL (as curator of JW NEAL) [Royal Ct]
    • Jersey
    • Royal Court
    • 30 July 2012
    ......, referred to; In re Neil Ashley (1990) Settlement, 2003 JLR N [9]; and In re DDD 1976 Settlement, ......

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