When a discretionary trust is established in a will or during the lifetime of the trust-maker, the rule from “Saunders v. Vautier” is frequently invoked. Trustees can determine when and how much beneficiaries receive from a discretionary trust. They have complete discretion over the distribution of all capital and income. This implies greater flexibility and the ability to safeguard assets if conditions alter.
Our will planning lawyers at Duensing Law make sure your wishes are legally binding and clearly expressed, safeguarding your assets and loved ones. We take the time to grasp your particular situation. Our team creates thorough wills and powers of attorney to guide you on effective estate management and avoiding typical mistakes. We also assist with the establishment of discretionary trusts, therefore giving you peace of mind knowing your will is managed in line with your wishes. If you have any other questions, contact our will planning lawyers at 416-601-4769.
According to “Saunders v. Vautier,” beneficiaries of a trust are allowed to change the trust and disregard the intentions of the trust creator. The trustees must follow the wishes of the beneficiaries, even if they conflict with the will-maker’s or trust-maker’s “intention” when creating the trust, if all possible beneficiaries of the trust, representing 100% of the potential “ownership” of the trust’s assets, unanimously decide that the trust should be terminated and/or varied.
A situation where a beneficiary will not receive certain property until a certain age, but the clause allowing for the gift does not include a “gift-over” to another person if the beneficiary does not reach the specified age. When the recipient reaches the age of 18, they can claim the gift right away, ending the trust.
The Saunders v. Vautier rule must not be applied if even one beneficiary of the trust, regardless of how distant their interest may be, declines to agree to the suggested modification; the trust will proceed as originally agreed. The rule from Saunders v. Vautier may still be applied if one of the potential beneficiaries of the trust has a legal disability, whether due to being a minor or something else. However, the Variation of Trusts Act (Ontario) requires the consent of the beneficiary with a legal disability, allowing the court to approve the proposed variation on the beneficiary’s behalf.
The trust rules should include a “gift-over” to another beneficiary if the initially designated beneficiary dies if the will or trust creator wishes to prevent the rule’s applicability.
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