Introduction

This is an interesting case dealing with the situation where the trustee cannot ascertain for certain whether a beneficiary is alive or dead.

Facts

The terms of the Alpha Zeta Trust (the “Trust”) provided that the beneficiaries were the settlor, the settlor’s nephew and the trustees of the Middlesex Hospital in London. In a letter of wishes, the settlor expressed the wish that after his death the income of the Trust should be paid to his nephew during his nephew’s lifetime and thereafter the capital should be paid to the trustees of the Middlesex Hospital in London. In 1999 the settlor wrote to the trustee informing it that the nephew had died and that his new wish was that after the settlor’s death the trust fund should be paid to the trustees of the Middlesex Hospital.

When the settlor died in 2002, the trustee carried out extensive enquiries as to whether the nephew was in fact dead. It was not possible to locate a death certificate of the nephew but none of the enquiries produced any evidence that the nephew was still alive.

Held

The Court was satisfied from the evidence that the nephew was no longer alive and as such the only continuing beneficiary of the Trust was Middlesex Hospital (which having merged with University College London Hospital (“UCL”) was known as UCL).

The Court agreed with the trustee that the decision to pay the entire trust fund of the Trust to the trustees of UCL was a momentous decision and confirmed that the trustee was right to seek the approval of the Court before doing so. The Court authorised the payment of the net assets of the Trust after payment of all proper and reasonable fees and expenses to the trustees of UCL.

Comment

This case is useful for trustees who find themselves in a similar situation to the trustee of the Alpha Zeta Trust. It is also noteworthy that the Court confirmed that the decision to pay the entire trust fund to the trustees of UCL, given the uncertainty surrounding the death of the nephew, was a momentous decision in relation to which it was right for the trustee to seek the approval of the Court.