Offshore Trust Update - Trustees Beware Of Undue Influence

The recent Jersey case of In the matter of the C Trust (2012) is a reminder to all trustees of the importance of ensuring they undertake a proper decision making process.

Facts

The case concerned a trust where by it was indicated by a letter of wishes that the trustee should consider the trust for the primary benefit of the settlor's widow, his son and his son's issue (of which there were two minors). The settlor's son was involved in matrimonial proceedings in England. It was agreed as part of these proceedings that the trust would assist the son in meeting his maintenance obligations to his wife. The wife sought to protect her interest by exerting pressure on the trustee to exclude the two minor beneficiaries of the trust. As a result the trustee with the consent of the protector excluded the minor beneficiaries from the class of beneficiaries of the trust.