Court allows ‘illegitimate’ child to benefit from trust fund

Trusts set up many years ago can sometimes contain provisions which seem out of step with the way people live their lives today.

Thankfully, when problems arise, the courts can often help to correct any anomalies.

A recent example involved a child who would have been unable to benefit from a trust fund because his parents were not married.

The trust had been set up by two brothers in 1974. In 1983, they made provisions that income from the fund should be paid to the daughter of one of the brothers once she reached the age of 25. The capital would then be held on trust for her children.

The deeds stated that the trustees would have the power to apply the trust capital to or for the daughter’s benefit and that the trustees should always act only in her interests.

The daughter then had a child while unmarried. This caused a problem because the way the trust had originally been set up meant that “illegitimate” children would not be able to benefit.

The family sought help in the High Court, which held that the trust required the trustees to act in the daughter’s best interests. It would not be in her interests to suffer anxiety because she could not provide for her child in the way she wished.

Therefore, it would be in her best interests if the trust was amended to allow her child to benefit.

Please contact Nicola Denton-Maish or Josie Birnie if you would like more information about the issues raised in this article any matters relating to trusts.