chapter  13
12 Pages

VARIATION OF TRUSTS

It is a basic principle that trustees must adhere strictly to the terms of the trust, and any deviation will constitute a breach of trust for which they will be liable. However, if all the beneficiaries are sui juris and consent to a deviation, the trustees will be protected. Furthermore, under the rule in Saunders v Vautier1 beneficiaries who are sui juris and between them absolutely entitled2 may put an end to the trust, and the trustees must hand over the corpus of the trust property as the beneficiaries direct. For instance, property is held upon trust for X for life, with remainder to Y and z. X/ Y and Z may, if sui juris, agree to partition the fund and direct the trustees to hand the capital over to them immediately in such shares as they decide. Such a course may be beneficial in order to avoid liability for estate duty on the death of the life tenant. On the other hand, where any of the beneficiaries is a minor or subject to a disability, such beneficiary is incapable of consenting to a deviation from the terms of the trust. The question may then arise as to whether the court can sanction such deviation for the benefit of any such beneficiary.