Edward Greenstreet died intestate on 28 October 2009 and his estate of £514,600 passed to his son, Kieran. Kieran died intestate on 17 May 2010. Kieran’s estate of £6,000, combined with the estate of Edward, passed to Kieran’s three year old son, Rory Greenstreet. The aggregated estates were held on statutory trusts for Rory contingently on his attaining 18 or marrying or forming a civil partnership under that age.
Kieran’s personal representatives were Ellen Wright (Kieran’s partner and Rory’s mother) and Michael Greenstreet (Kieran’s uncle). Ellen Wright (who was also Rory’s litigation friend) expressed the view that it would be undesireable for Rory to have access either to income or to capital at 18. The personal representatives applied for the approval of an arrangement under which they would hold Edward’s estate as trustees upon trust for Rory (inter alia) contingently on his attaining 30.
Norris J declined to approve the proposed arrangement but approved a substantially revised arrangement under which Jonathan Gater (a solicitor acting as the personal representative of Edward) would be appointed as a third trustee and providing for Rory (inter alia) to be entitled to income at 18, 10% of the fund contingently upon attaining 21 and the balance contingently on his attaining 25.
Held (approving a substantially revised proposed arrangement)
(1) There were a number of unsatisfactory procedural features to the application:
- (a) The matter had been put before the judge as a paper application. While there may be truly exceptional cases where this is appropriate, any approval of a variation however straightforward ought to be considered at a hearing with proper argument (para ).
- (b) It was improper for Ellen Wright to have been placed in the dual position as promoter of the proposal (as personal representative of Kieran’s estate) and Rory’s litigation friend. She could not both advocate the arrangement and subject it to independent scrutiny in the sole interest of Rory. It would have assisted if Rory’s litigation friend had been a family friend or professional. Separate Counsel was a fundamental requirement (para ).
- (c) Michael Greenstreet had not been advised as to the watchdog role of a trustee. Nobody was looking out for the interests of unrepresented ultimate beneficiaries (para ).
(2) Any variation must be for Rory’s benefit, otherwise the court had no discretion to approve it (para ). The court was not redistributing property or directing a settlement but rather supplying consent on behalf of Rory. Benefit is generally financial in nature but is not necessarily so. The assessment of benefit and advantage should be approached with caution (para ).
(3) The financial advantage of an immediate saving of £89,000 of inheritance tax should be weighed against the financial disadvantage to Rory in being denied income for twelve years and the disadvantageous tax regime that would apply to the proposed trusts (para ).
(4) Deferment of vesting is capable of constituting a ‘benefit’ (paras -) but postponement of vesting is not necessarily ‘beneficial’ in principle. In each case, the court must be persuaded that it is justified on the facts of a particular case. Factors might include the personal characteristics of the beneficiary, the size of the fund, circumstance in life or family context (para ).
(5) The original proposal could not be consented to because it was too close to a resettlement rather than a variation. There was nothing in Rory’s character to suggest that there was a real risk he could not deal with income or capital without supervision before the age of 30. It was wrong to approve a long-term trust where family controlled the purse strings. The right of Rory to autonomy as a young adult should be respected (para ).
(6) Proportionate measures to address the risks but going no further than necessary were provided by the revised arrangement. Rory would be introduced gradually to his wealth and those who cared for him would have a further opportunity to bring the matter before the court if he showed signs of going off the rails (para ).JUDGMENT MR JUSTICE NORRIS:  Edward Greenstreet died intestate on 28 October 2009. His entire estate, which had a net value of some £514,600, passed to his son Kieran. No inheritance tax was payable because the deceased was entitled to a doubled-up nil rate band. Edward Greenstreet’s estate remains unadministered.  Unfortunately, Kieran himself died …