Are You Sure You’re A Grandchild?

Kevin Modiri

In a recent inheritance dispute case it highlighted a fundamental issue and, even though the it was decided in the USA and therefore has no bearing in law over cases decided in England and Wales, the facts of it could easily have followed a similar path if decided in England and Wales.

Damian Hurley Trust dispute

Case details

The case involved Elizabeth Hurley’s son, Damian. Damian was born out of wedlock. His father was the son of a very wealthy individual by the name of Dr Peter Bing.

Dr Bing had created a family Trust, no doubt with a view to limiting Inheritance Tax to his estate on his death. The family Trust at inception included in the class of beneficiaries ‘future grandchildren’. The Trust was created before any of Dr Bing’s children had any children that were born out of wedlock. Dr Bing was a fairly conservative gentleman and did not approve of children being born out of wedlock. He therefore latterly sought to apply a different interpretation to the definition of ‘grandchild’. Later iterations of Dr Bing’s, then acting as Trustee, interpretation of the word grandchild sought to exclude those individuals that were born out of wedlock and/or that did not live in the parents’ family home.

The Judge found that the word grandchild had been used unambiguously and accordingly applied its dictionary definition, thus including Damian in the Trust as a beneficiary.

Comment

The above result is not particularly surprising as the Trustee in this case, Dr Bing, was attempting to insert words/definitions into the Trust deed after its creation that were unnecessary for interpreting the effect of the Trust deed. Dr Bing no doubt argued that, as he created the Trust, he had never intended to benefit grandchildren born out of wedlock.

In the law of England and Wales, it is possible to rectify a Trust deed after its creation on the basis of a mistake but you would need to show that the intention of the person creating the Trust at the time of its creation had some other intention to the one expressed in the Trust deed itself. Where Dr Bing fell down was that his desire to exclude grandchildren born out of wedlock was an afterthought following some of his grandchildren being born out of wedlock, rather than being an intention that he held at the time of the Trusts creation.

It is always best to seek professional advice and discuss fully any matters, such as the beliefs held by Dr Bing regarding children being born out of wedlock, before creating a Trust document. If you are, however, in a position where a Trust has been created and you believe that there is a mistake in it or if a Trustee is trying to exclude you alleging a different interpretation of the Trust deed, the specialist team at Nelsons would be happy to discuss the matter with you.

Damian Hurley Trust DisputeHow Nelsons can help

Kevin Modiri is a Partner in our Dispute Resolution team, specialising in inheritance dispute claims.

If you have any questions in relation to the subjects discussed in this article, please contact Kevin or another member of our expert team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.

 

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