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Evan Price successfully opposes an application

6th Jul 2021

Evan Price successfully opposes an application by the Trustee of a Discretionary will trust, seeking court approval for a proposed distribution. The claim was found to be improperly constituted since certain discretionary objects were not parties to the proceedings and no provision had been made for their representation. Moreover, on its merits, the distribution was inappropriate since the discretionary objects to whom it would go was an undischarged bankrupt. The trustee in bankruptcy would claim the distribution as after-acquired property and so there was no benefit in the distribution being made to the beneficiary.

The Trustees were the principal creditor of the bankrupt as executors and the distribution was really intended to benefit the other beneficiaries of the estate (who were not beneficiaries of the discretionary trust). As such the distribution would be improper, or else a fraud on the power. The Trustees were also conflicted since the first trustee was a personal representative of the creditor’s estate and would hence effectively benefit from the distribution to the bankrupt. Moreover, the relevant discretionary object had validly disclaimed his interest, and was not barred from doing so by mere lapse of time, so long as he had not relied on it. At a further hearing, the trustee of the discretionary trust and the executor of the estate failed in her application for an indemnity as to her liability for the costs of the Defendant from other funds also settled by the settlor in her will.

Instructed by Paul Willan at Athena Law.

The judgments can be found here and here.

Evan Price Evan Price Call 1997
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