For decades the best precedents have included, in a detailed definition of qualifying “Beneficiaries”, the term “surviving spouse”, precisely to obviate this problem. Otherwise the term “spouse” takes its general law meaning i.e. a person who is lawfully married to the other party while both are alive, even if separated. This does not include a surviving or former spouse or a cohabitant, even if there are living children of the union who are themselves beneficiaries.
The approach to the interpretation of documents and statutes is similar up to a point, e.g. as regards “ordinary words”, but statutes often employ a specialised definition and must be construed purposively to discern (often oracle-like) the intention of Parliament. The intention of the settlor is scarcely ever relevant, unless rectification in accord with their plainly disregarded instructions is in point.
Some statutes use the general law term e.g. s 18 IHTA 1984 and s.714(2) ITA 2007 (but compare s.733A and also s625 (4) ITTOIA 2005). Others ordain prescribed consequences for existing or future documents but can leave that open to doubt e.g. the 2013 Act making same-sex marriages lawful.
Settlors are often reluctant to include contingent recipients in the explicit class of a (non-secret) trust e.g. former spouse, civil partner, co-habitant, lover, illegitimate issue, despite their being persons who only can, and not must, benefit. This has given rise to including a power of the trustees to add a person as a beneficiary at their discretion, usually constrained by a third party consent mechanism to minimise abuse, often supplemented by a non-binding letter of wishes.
I agree with Malcolm that there is no general rule of supervening disqualification. If trustees exercise a power to benefit a person who is the current spouse of a beneficiary, alone or jointly, a court is unlikely to regard it as equitable to deprive them of a continuing benefit after the qualifying spouse’s death, unless it was originally so limited or was revocable in that event or more generally.
But after that event no benefit can be conferred without breach of trust or fraud on a power. Granting a benefit to a qualifying beneficiary who is a child of the surviving spouse which incidentally benefited the parent, e.g. some kind of occupation right without restrictions on sharing, might not be such a fraud. Non-professional trustees robustly in tune with practical family politics may adopt the Nelson touch (I could not possibly comment).
Trustees should not “evict” anyone from residential property they own, not a licensee holding over nor even a trespasser, without specialist advice for all involved (Kerching!), or in addition to any civil liability they may “not have to say anything but if they fail to mention…”
Jack Harper