Trustees usually know when a structure is becoming a problem well before anyone issues proceedings. A beneficiary who has started asking pointed questions, a predecessor’s decision that will not stand up to scrutiny, a distribution nobody can now explain, or a co-trustee who has gone quiet.
That is the point at which advice is worth taking. We advise trustees and trust company businesses on contentious risk: what the exposure actually is, what the Royal Court can be asked to do about it, and how to act without creating a personal liability along the way.
Secure a Contentious Risk Assessment
Where We Help
Article 51 Directions
Article 51 of the Trusts (Jersey) Law 1984 gives the Royal Court an exceptionally wide discretion in relation to trusts, and a correspondingly wide class of people who can apply to it, including trustees, beneficiaries, protectors, enforcers and others with standing.
A trustee facing a decision that is momentous, or one that is likely to be challenged whichever way it goes, can apply for the Court’s directions rather than carry the risk alone. Where the Court sanctions the decision, the trustee is protected in acting on it.
Beddoe Applications
Where a trustee is considering bringing or defending proceedings, a Beddoe application allows the Court to be asked in advance whether the trustee may do so at the expense of the fund.
The value of a Beddoe order is that it removes personal costs exposure from a decision that would otherwise be taken with hindsight against you. It needs to be made at the right time, on properly presented material.
Retiring and Incoming Trustees
Trustee changes are where inherited problems surface. An incoming trustee is entitled to a proper handover, and to understand what it is taking on. A retiring trustee is entitled to a sensible indemnity, but not to a limitless one.
We act on both sides of this. We can advise an incoming trustee on what to require before accepting office, and on what to do about what it finds afterwards. Where a predecessor’s conduct needs to be investigated, the limitation position is materially better for an incoming trustee than most people assume: under Article 57 the period does not run against an incoming trustee, and no time limit applies to claims founded on fraud or brought to recover trust property still held by a trustee.
We routinely act in the removal and replacement of trustees, and we work alongside incoming trustees to investigate what came before.
Beneficiary Information Requests
Requests for information are frequently the first sign of a dispute, and answering them badly can create one.
We can advise on what a beneficiary is entitled to see, what may properly be withheld, and where the Court’s supervisory discretion is likely to land. Both an unreasonable refusal and an over-generous disclosure can cost a trustee personally.
Mistake, Rectification and Setting Aside
Where a decision has produced a result nobody intended, particularly where the consequence is a tax charge, there may be a route to setting it aside or rectifying the instrument. These applications turn on the evidence of what was actually intended and understood at the time, which makes contemporaneous records decisive.
How We Work
We are a litigation practice, not an administration provider, and we are not competing with you for the trusteeship. That means we can be direct about exposure in a way that is not always comfortable but is generally more useful.
We look at trust problems the way they would look if contested: what is documented, what is assumed, and what would actually be established in evidence. Applied early, that view frequently keeps a matter out of court entirely.
We operate completely free of institutional conflicts of interest. We hold no standing retainers with the major trust companies or banks, which means we can act for you against a predecessor, a co-trustee, or an institution, without a conflict elsewhere in the firm preventing it.
Speak to Our Contentious Trusts Team
Or Call Us: +44 (0)1534 620500
Frequently Asked Questions
We have inherited a structure with problems. Where do we start?
Establish the position on the documents before making any decision that could be characterised as a fresh act of administration. What matters is what the file shows, what is missing from it, and what your predecessor knew.
The limitation position is usually more favourable than an incoming trustee expects, so a problem that looks historic may well still be actionable.
When should we apply for directions rather than simply decide?
Where the decision is momentous, where the beneficiaries are in conflict, where the trustee has an interest of its own, or where the decision is likely to be challenged however it is made. In those cases the cost of an application is usually less than the cost of defending the decision afterwards.
A beneficiary is demanding everything. Do we have to provide it?
No. Beneficiaries do not have an automatic right to inspect every document. Trust accounts and basic structural documents are generally disclosable, while material recording the trustee’s own deliberations, and letters of wishes, may be withheld.
The Royal Court retains a supervisory discretion to order disclosure where that serves the interests of the trust as a whole, so a blanket refusal carries its own risk.
