Creation of trusts—beneficiaries
Creation of trusts—beneficiaries

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • Creation of trusts—beneficiaries
  • Who may be beneficiaries
  • Identifying the beneficiaries
  • Age of beneficiaries
  • Class closing date
  • Identification by relationship
  • Trusts of the beneficial interests
  • Default clause or long-stop provision
  • Exclusion of settlor (and spouse/civil partner)

Who may be beneficiaries

Every person who would be capable of owning property if of full age and sound mind may be a beneficiary under a trust, even if they are not of full age and sound mind.

Identifying the beneficiaries

The three certainties

For a trust to exist the three certainties must be present:

  1. the certainty of intention

  2. the certainty of subject-matter

  3. the certainty of objects

Note that charitable trusts do not need to satisfy certainty of objects so long as there is a general charitable intention.

Certainty of objects—named beneficiaries

Every settlement deed must identify the beneficiaries. In the case of a simple life interest trust, there will be only a small number of beneficiaries and they may be named in the clause setting out the beneficial interests. For example:

'The Trustees shall pay the income of the Trust Fund to [X] during [his] life and after [his] death shall pay the capital to [Y].'

The beneficiaries may be defined in the definitions clause and then referred to by reference to that definition. For example:

'The Trustees shall pay the income of the Trust Fund to the Life Tenant during [his] life and after [his] death shall pay the capital to the Remainderman.'

Where only named beneficiaries are to benefit, the objects are certain.

Certainty of objects—description of beneficiaries

Where the class of