Legal Principles and Key Points
- In the case of Re Bowes  1 Ch. 507, it was held that a trust relating to a purpose, but ultimately for the benefit of a group of people, can be construed as solely being for the benefit of those people.
- As such, the beneficiaries of such a trust can exercise their right to dissolve the trust and receive the money without working towards the purpose.
Facts of the Case
- A will stipulated C would inherit the deceased’s estate for life and the rest in tail. Included as well was a gift of £5000 to the trustees to be used to plant trees for shelter on the estate.
- C argued that the legacy is only intended for purposes that benefit their estate, and that such an amount solely being used to plant trees was wasteful. As such, they applied that the full mount of the legacy should be paid over to them, rather than being used to plant any trees at all.
- Was the trust directly for the benefit of the owners of the estate?
- Does the beneficiary have the right to dissolve a purpose trust even if no action has been taken to achieve purpose?
Held by the Chancery Division
- C was the beneficiary of the trust-As the purpose directly related to the estate for which C was now the owner, the purpose trust was for their benefit. As such, since C was of age, they could dissolve the trust and receive the full amount of the legacy to use in any manner that they chose.
- The trust of $5000 to plant trees was valid. It did not give the trustees an option in how they spend the money, even though it would result in the estate having far more trees than could reasonably be put on it.
- “Therefore, there is nothing illegal in the gift itself; but the owners of the estate now say: ‘It is a very disadvantageous way of spending this money; the money is to be spent for our benefit, and that of no one else; it was not intended for any purpose other than our benefit and that of the estate. That is no reason why it should be thrown away by doing what is not for our benefit, instead of being given to us, who want to have the enjoyment of it.’ I think their contention is right. I think the fund is devoted to improving the estate, and improving the estate for the benefit of the persons who are absolutely entitled to it’ .
- If the trust stipulated, for example, that part of the estate was to be made into a public park, the outcome might possibly be different. C would not necessarily be the beneficiary of such a trust, and thus he would not be entitled to dissolve it.