Published: Fri, 12 Oct 2018
Saunders v Vautier (1841) 4 Beav. 115
A sole beneficiary’s right to terminate a trust prior to the date stipulated in the trust.
A father left in his will stock in a company for his young son, to be held by a trustee for his son as the sole beneficiary until he turns twenty-five years of age. The stock was to accrue and accumulate interest and dividends over the years. The terms of the trust instructed the trustee to transfer the stock to his son when he reaches twenty-five years of age. However, when the son turned twenty-one years old, he requested that the trustee transfers the stock and funds to him, thus terminating the trust.
The question arose as to whether the beneficiary of trust may require the termination and/or transfer of the trust and thereto prior to the date stipulated in the terms of the trust.
The Court stipulated the rule that, where the beneficiary has an absolute, indefeasible interest in a trust, and is of an adult age and of sound mind, then the sole beneficiary may require the trust to be terminated and trustee to transfer the legal estate before the date stipulated in the terms of the trust. The Court propounded the principle that a sole beneficiary, or the absolute consent of all beneficiaries to a trust, enables the beneficiary to terminate or transfer their beneficial interest under a trust. Thus, although it may be contrary to the intentions of the father for the value of the stock to accrue interest for a longer period, the son, as the sole beneficiary, was not bound to wait until the age of twenty-five and was able to require payment and divest the stock at the earlier age of twenty-one against the terms of the trust.
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