The rule in Saunders v Vautier: ending a trust early
By her will, Sofia's grandmother left £60,000 to trustees 'on trust for my granddaughter Sofia absolutely, but the trustees shall not pay the capital to her until she reaches the age of 25; until then the income is to be accumulated and added to the capital.' Sofia is now 19, has full mental capacity, and asks the trustees to transfer the whole fund to her. No one else has any interest under the trust.
Which of the following best describes Sofia's position?
Choose one answer to see the reasoning.
Worked answer
Correct answer C: She can call for the capital and accumulated income now, as an adult of full capacity absolutely entitled to the fund.
THE RULE TO REMEMBER
Adult beneficiaries of full capacity who are together absolutely entitled can call for the trust property and end the trust.
The rule in Saunders v Vautier: ending a trust early
Under the rule in Saunders v Vautier (1841), a beneficiary (or beneficiaries acting together) who is of full age and capacity and absolutely entitled to the trust property can call for it and bring the trust to an end, even though the trust instrument postpones enjoyment. The gift here is to Sofia 'absolutely'; the reference to age 25 merely postpones payment and does not make her interest contingent. As she is over 18 and the only person interested, she can call for the whole fund. Contrast a gift 'to Sofia if she attains 25', which would be contingent and could not be called for at 19.
Why A is wrong: A direction merely postponing enjoyment does not bind a sui juris beneficiary who is absolutely entitled.
Why B is wrong: Court approval under the 1958 Act is needed only where some beneficiaries cannot consent (for example minors or unborn persons); none exist here.
Why D is wrong: The age of majority is 18; 21 was the age of majority when Saunders v Vautier was decided.
Why E is wrong: Sofia is entitled to both income and capital, so she can call for the whole fund.
That's today's practice done. Another featured question tomorrow.
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