If one of the beneficiaries of a discretionary trust is not in agreement with the remainder, can the trustees make the best decision?
Teresa Ingarfield
Willsons Solicitors
I would say that where the trustees anticipate difficultly from one or more of the beneficiaries it is particularly important to show that the trustees have exercised they powers correctly. They must be seen to be acting as fiduciaries, in accordance with the powers and restrictions of the trust document, and to have considered all the relevant circumstances.
In particular, I would say that it would be important to show that the dissenting beneficiaries have been given an opportunity to properly put their case to the trustees. I would invite them to submit their views in writing, and remind them of their right to take independent legal advice.
If, having done that, I as a trustee still believed that the best course of action was to proceed against the wishes of the dissenting beneficiary, I would then do so.
Taurean Drayak
Elliot, Bond & Banbury
Unless the terms of the trust require the beneficiaries to consent to
the trustee’s decisions, which would be unusual in a discretionary
trust, the trustee is not bound by the views or wishes of any of them.
When exercising their powers/discretion, a trustee may reasonably seek
the views of the beneficiaries, but cannot be bound by them.
Often, the beneficiaries of a discretionary trust are members of an open
class including minors and unborn individuals. In such cases, a trustee
could never obtain consent of all the beneficiaries, no matter how in
accord the adult members were at any one point in time.
With a discretionary trust, the trustee can only make the best decision
in the circumstances as they are then known, with such advice as may be
necessary to ensure all relevant factors have been considered (and
irrelevant factors ignored).
Paul Saunders
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