Termination of trusts—beneficiaries
Termination of trusts—beneficiaries

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

  • Termination of trusts—beneficiaries
  • Duty to distribute to the correct beneficiaries
  • Relief for honest and reasonable conduct
  • Payment under a forged document
  • Construction of the trust documents
  • Protection by advertisement
  • Assignment of trust interests/powers of appointment
  • Dead beneficiary
  • Illegitimate, legitimated and adopted beneficiaries
  • Payment into court in certain circumstances

Duty to distribute to the correct beneficiaries

On the termination of the trust, the trustees are under a duty to distribute the trust assets to the right beneficiaries. Failure to distribute to the correct beneficiary can subject the trustees to liability for breach of trust, although the trustees could apply to the court for relief for honest and reasonable conduct.

Relief for honest and reasonable conduct

If it appears to the court that a trustee(s) is or may be personally liable for any breach of trust but that they have acted honestly and reasonably, and ought fairly to be excused for the breach and for omitting to obtain the court's directions in the matter, the court may relieve them either wholly or partly from personal liability for the breach.

‘Honestly’ means that the trustee acted in good faith. The word ‘reasonably’ indicates that the trustee acted prudently.

The relief is discretionary and in exercising its discretion, the court will have regard to the interests of both the trustees and the beneficiaries in deciding whether the breach of trust ought to be forgiven in whole or in part.

The burden of proving that they have acted honestly and reasonably is on the trustee concerned.

Each case is decided on its own facts and a factor capable of influencing the court is whether the trustee is a professional trustee or not. The court

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