Trust Variation To Benefit Children From Same-Sex And Unmarried Families - The Facts, Considerations And Implications

Representation of Y Trust and Z Trust [2017] JRC 100

The decision of Jersey's Court recent decision in the Y Trust and Z Trust provides welcome guidance in respect of article 47 applications to vary a trust. In particular, the Court considered the interplay between the wishes of a settlor and the Court's assessment of "benefit", a point which has not been considered before by the Court. The decision also examines article 47 applications alongside public policy considerations affecting a modern society.

Ogier acted for the family who brought the application before the Royal Court.

Facts

The application relates to two Jersey law governed trusts. The terms of both trusts prohibited children born into certain relationships from forming part of the beneficial class. These restrictions affected, inter alia, children of same sex relationships and children born out of wedlock. It was these restrictions that were the catalyst for the present variation application being brought.

A significant amount of time and thought had been given by the family to the matter in advance of bringing the application. Although they all held a great respect for the views of the settlor, they felt those views were out of step with modern day thinking and the family was unified in its decision that the terms of the trusts should reflect more closely modern moral and familial constructs. Accordingly, the revised definitions now placed before the Court provided for; i) an equal recognition of issue of same sex relationships, ii) a general recognition of illegitimate children, iii) recognition of the possibility of beneficiary status for a person treated as a child and iv) a relaxation of the age threshold for adopted persons to qualify. The family's chosen mechanism was both to widen the scope of the beneficial class and create a family council to consider those who may still fall outside the definitions but who should properly be considered "family".

Due to the significant wealth in the two trusts, all those falling within the beneficial class would be provided for well. Any dilutive effect of widening the class was not therefore considered by the Court to be a material factor.

The objective at the heart of the approach adopted by the family was to preserve family unity and harmony. The family were acutely aware of the divisiveness that wealth could bring and didn't want to fall prey to it. The Court considered this approach to be exemplary and an extremely laudable one...

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