It is common for Trusts to be created in Wills.
For example, if a person making a Will has young children or grandchildren, they may feel it is inappropriate to give a young person a large amount of money, so instead they will create a trust. The funds are invested, and once the (grand)child reaches a certain age, they receive all the money in the trust.
Last week, reasons for judgement were released in the case Fargey v. Fargey.
Here, a young adult (aged 23) applied for an Order terminating a trust early. The trust allowed the adult income from the trust until age 25, when the entire fund would then transfer to him.
The Court agreed, stating that the Trust was already “vested” in him and he was above the age of majority.
We may see a lot more of this legal action in the coming years, as the tax rules on accumulating funds in trusts have changed.
This ad ran in the Richmond Review on May 13, 2015.