Locking it away until she is 24

FB13

xylophone wrote: »

See also

https://www.lawteacher.net/free-law-essays/property-trusts/trust-property-trustee.php

Under a discretionary trust, the trustee may have a discretion as to the precise value of the beneficiaries' entitlement, or as to whether certain beneficiaries receive anything at all. An example of a trust term that would grant this dispositive discretion to the trustee is where a trust is established for a group of beneficiaries in such portions as the trustee shall in their absolute discretion see fit.

The father does not have any such discretion as the daughter's entitlement is fixed?

While you are kind of on the right track, you are being confused by the posters who think discretionary trusts are some magic bullet that defeats Saunders v Vautier. They are wrong. Saunders v Vautier applies to discretionary trusts as well. They are trying to make a distinction between bare and discretionary trusts which is wrong.

If you want to defeat Saunders v Vautier in the family scenario being discussed using a discretionary trust, you need another object (potential beneficiary) who will not (or cannot) consent to Saunders v Vautier being used. The dad could serve that role at the same time as being a trustee. Or use a younger minor who cannot give consent.

aroominyork

Am I the only one who had a quiet snigger at the thread title?

Malthusian

cloud_dog wrote: »

I GIVE the sum of XXXXX pounds (£xxxx) to my said granddaughter GC1 on her 18th birthday with a further YYYYY pounds (£YYYY) to be held on trust for her by her father ME until she attains the age of 25 years or if he in his absolute discretion thinks it appropriate to give her the benefit of the money at an earlier date.

I disagree with IanManc and agree with xylophone and FB13. If the daughter asks for the money at 18 she will get it. This is a textbook Saunders v Vautier case. There are no other potential beneficiaries, which means at 18 she has the right to wind up the trust.

If you want to defeat Saunders v Vautier in the family scenario being discussed using a discretionary trust, you need another object (potential beneficiary) who will not (or cannot) consent to Saunders v Vautier being used. The dad could serve that role at the same time as being a trustee.

Correct, but you may as well just leave it to the Dad absolutely, with a letter explaining you want it to go to his daughter when she is 25 or as and when she is ready. And save the unnecessary expense, complication and tax of setting up a trust. He might spend it on himself, but exactly the same applies if you leave it to a discretionary trust of which he is trustee and a potential beneficiary.

The only way around Saunders v Vautier is to create a risk that your intended beneficiary never sees the money - by adding other potential beneficiaries. If you are 100% certain you want them to have the money, you have to accept that you can't stop them spending their own money once they are a compos mentis adult.

Securityguy of the Deaths, Funerals and Probate board said some months ago that a trust is a solution you don't understand to a problem you haven't properly thought about, and this does not appear to be an exception to the rule.