Unreasonable decisions — a cautionary tale for trustees

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The Royal Court set aside an instrument of appointment excluding beneficiaries from a trust in a trust and divorce context as being a decision which no reasonable trustee could have taken.

Two minor children (aged seven and five and known as A and B) applied, through their guardian ad litem, advocate Mark Temple, to set aside a trust instrument of appointment dated 5 November 2010 (the instrument of appointment). The instrument of appointment was executed in relation to a trust known as the C Trust (the Trust) established in 1993.

At the time of establishment of the Trust, the settlor was married to E (“the Widow”). The Settlor and Widow had one living son (the Father). During the settlor’s lifetime, the father had married H (the Mother), who was born in Peru to a Peruvian father and a Scottish mother. A and B were the children of the Father and the Mother and the grandchildren of the settlor and the Widow (the Grandchildren). Only one of the Grandchildren had been born before the settlor’s death…

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