For a while it was fashionable, especially in some offshore
jurisdictions, to create trusts with no primary beneficiaries.
Instead the Settlor would name a default beneficiary and give the
trustees a power to add primary beneficiaries at a later date
(meaning greater control for the Settlor under the guise of greater
flexibility).
The default beneficiary, usually a charity (and so often the Red
Cross that this type of trust is colloquially known as a ‘Red
Cross' Trust) was rarely intended to receive significant if
any benefit, but was crucial to the operation of the trust. That is
because a trust is only a trust where there is a beneficiary (even
if only a default beneficiary) on the principle that there must be
someone able to hold the trustees to account.
