Facts
- Miss Barlow, the testatrix, directed that certain items, specifically paintings, be sold following her death.
- Her will granted an option to her "friends" to purchase these items below market value.
- The use of the term "friends" in the will raised concerns among executors regarding the certainty and legal validity of this class of beneficiaries.
Issues
- Whether a gift in a will to a group described as "friends" satisfies the legal requirement that beneficiaries must be sufficiently certain for a valid trust or option.
- Whether the term "friends" provides adequate clarity for executors or trustees to identify qualifying individuals.
Decision
- The Court of Appeal, led by Browne-Wilkinson LJ, upheld the validity of the gift to "friends."
- The court distinguished gifts subject to an option from direct trusts, holding that for a purchase option the group need not be completely defined.
- Executors are required only to determine if a specific person qualifies as a "friend" of the testatrix, not to identify or list every possible friend.
- The court found that the testatrix’s intention was for individual friends to benefit rather than to create a trust for a defined group.
Legal Principles
- A conditional gift or option to a group will be valid if at least one person can clearly qualify as a beneficiary ("one-person test").
- Absolute certainty about the entire class is unnecessary for option-type gifts, provided it can be shown in any case whether someone is a friend.
- The approach is distinguished from the stricter "is or is not" test for discretionary trusts as set out in cases like McPhail v Doulton [1971] AC 424.
Conclusion
The decision in Re Barlow’s Will Trusts established that gifts to "friends" can be valid if it is possible to identify at least one qualifying individual, adopting a flexible "one-person test" and emphasizing the importance of clear will drafting to reduce disputes.