Out-Of-Date Family Trust Varied to Recognise Same-Sex Spouses

Family trusts often date back many years, and those who drafted them could not have been expected to foresee all the dramatic social changes that have happened since pen was put to paper. In one case, the High Court’s intervention was required to vary a trust so that same-sex partners could be recognised as potential beneficiaries.

The trust had been set up in the 1960s to preserve assets which included a stately home that had been owned by the same family for over 300 years. It made provision for spouses of members of the family. The draftsman, however, had not predicted the advent of civil partnerships and same-sex marriages.

The trust enjoyed certain irreplaceable tax management advantages and the option of creating a fresh settlement was therefore unattractive. In upholding the trustees’ application to vary the trust, the Court accepted that it required a much-needed overhaul. There were financial, ethical and moral reasons why the trust’s definition of ‘spouse’ should be extended to embrace formal same-sex relationships. The Court also approved variations which extended the trust’s lifespan by a further 125 years and conferred additional investment powers on the trustees.

For many purposes, the word ‘spouse’ is taken to include civil partners and same-sex spouses. However, in this case, the wording of the trust document was such that a change to modernise it was necessary.