Construction of Wills – Re Bose Trusts [2012] EWHC 858 (Ch)

 In Trusts

Disclaimer: LawSkills provides training for the legal industry and does not provide legal advice to members of the public. For help or guidance please seek the services of a qualified practitioner.

This case looks at the meaning to be given to words written by the Testator himself in a homemade Will.  Do they give rise to a trust over income or merely a power?  Although the answer depends on the exact words in each case, as well as any contrast with other words used in the Will, this case is useful in showing an example of what will constitute a power as opposed to a trust.  It also looks at whether that power will fail for uncertainty of objects.

The facts

Mr Saral Bose died on 5 June 1972 leaving a handwritten Will dated 22 June 1967.  It was assumed that the Will was written out by the deceased himself.  Under the Will the widow Florence Bose was appointed sole trustee but she was replaced by an order of the Court of Protection on 30 March 1995 by the Public Trustee.  Florence died on 23 May 1998 and an application was brought by the Public Trustee in February 2011 concerning the construction of clause 6 of the Will following the termination of the widow’s life interest. The clauses in the Will were un-numbered but the court inserted numbers for ease of reference.

Clause six stated:

“ After the death of my wife the bank will act as the sole trustee of the estate as left by my wife and it is empowered to grant, out of the net income, scholarships for education in India, British Isles or elsewhere to my promising relatives (descendants of my brothers and sisters, the individual names of whom will be shown in a list, to be supplied later on) and or to help out (out of one-quarter of the income as a maximum) the deserving materially hardship cases amongst my relatives.”

FREE monthly newsletter

Wills | Probate | Trusts | Tax  | Elderly & Vulnerable Client

  • Relevant learning and development opportunities
  • News, articles and LawSkills’ services
  • Communications which help you find appropriate training in your area

Did this clause six contain a trust or merely powers?

The clause refers to the possible income recipients firstly by reference to a list.  No list could ever be found so who were the objects of this part of the clause?

The final question over clause 6 was whether the power or trust failed for uncertainty because it was to apply up to one-quarter of the income “to help…. the deserving materially hardship cases amongst my relatives ”.

The law

Counsel for the descendants of the deceased’s brothers and sisters relied on Re Birks [1900] 1 Ch 417 that as the Will was homemade it is inappropriate to assume that the Testator used technical or legal terms in their correct sense.

Lewin on Trusts 18th Ed. 30-33 and Theobald on Wills 17th Ed. 25-019 provide that a power to appoint amongst a class of relations is not inherently uncertain.  The relevant test is whether it can be said with any certainty that any given individual is or is not within the specified class. A distinction must be drawn, when answering that question, between conceptual and evidential uncertainty Re Baden’s Deed Trusts [1973] Ch 9, 22.

The decision

The judge did not agree with submissions made on behalf of the descendants of the deceased’s brothers and sisters that as the Will was homemade it was not appropriate to assume that the deceased would use legal or technical terms in their correct sense.  Although the deceased’s first language was not English (he was born in India to a Hindu family), “the language used is good, the handwriting educated and the content characteristic of one accustomed to managing property.”  The words were therefore to be given their normal meaning.

The language used in clause 6 was contrasted with different language used in clause 4 which dealt with the widow’s income entitlement if she remarried.  The judge found there to be clear differences in language, with clause 4 stating “the balance of the income will be devoted [my emphasis] to the benefit of…” while clause 6 stated “…it is empowered [my emphasis again] to grant.”  He found the class of relatives in the two clauses to be different, as well as the way income was to be applied in each clause.  Clause six was therefore held to contain only a power exercisable over the net income and not a trust.

The judge found that the reference to the list was an essential part of the definition of the beneficiary class of “promising relatives”. As there was no list, there was no certainty as to whether someone was in the class so there could not be any objects.  The power therefore failed for uncertainty in respect of the “promising relatives”.

With regard to the final question over clause 6 concerning ascertaining those in material hardship, after some hesitation, the judge held that the concept of material hardship was sufficiently certain.  But he went on to find that it was too difficult to divide those people within the material hardship group who were deserving from those who were not.  Therefore the power in the second part of clause 6 failed for uncertainty too.

It followed that the capital and unapplied income of the estate would therefore devolve on a partial intestacy.

The judge went on to comment unfavourably on the Public Trustee taking so very long to bring the construction of the Will before the court. The widow died in May 1998 but it took until February 2011 for the claim to be issued, “I can well understand that the administration of the Testator’s estate following the death of the Widow would require some investigation in India and elsewhere.  On the face of it over 12 years is excessive.”

Practice Points

  1. When a practitioner is drafting any document, careful use of precedents is always preferable to using “ordinary” words so there is no doubt as to the meaning of any clauses.
  2. If you come across documents where their meaning is uncertain, obtain advice on them and if necessary make an application to court for their construction to be ruled upon.
  3. Remember the difference between a power of appointment and a trust is that the beneficiaries in default of appointment under a trust are entitled to the trust’s assets if the trustees fail to make a selection; whereas with a power, if the trustees fail to make a selection between the beneficiaries, the money reverts back to the settlor or to his estate.
  4. Ascertain the meaning of documents quickly and not after, for example, 12 years, when the beneficiaries entitled on intestacy will be harder to track down and if found, may have suffered as a result of the delay in receiving their entitlement.

Laura Banks & Gill Steel

The LawSkills Monthly Digest

Subscribe to our comprehensive Monthly Digest for insightful feedback on Wills, Probate, Trusts, Tax and Elderly & Vulnerable client matters

Not complicated to read  |  Requires no internet searching |  Simply an informative pdf emailed to your inbox including practice points & tips

Subscribe now for monthly insightful feedback on key issues.

All for only £120 + VAT per year
(£97.50 for 10+)

Lawskills Digest
Recent Posts
investing money for minors