Re Inns [1947] Ch 576

Facts

  • The case considered the powers of beneficiaries collectively holding full equitable ownership of trust property.
  • The court examined when and how such beneficiaries could direct the trustee to transfer legal title and terminate the trust.
  • The matter addressed requirements for valid consent when beneficiaries seek to instruct trustees about disposition of trust assets.
  • The case arose in the context of existing legal principles established in Saunders v Vautier, focusing on trust termination and beneficiary rights.

Issues

  1. Whether beneficiaries who collectively possess entire equitable interests in trust property may direct trustees to transfer legal title and terminate the trust.
  2. What constitutes valid and effective beneficiary consent to such directions.
  3. How the rule applies to trusts with multiple, contingent, or discretionary beneficiaries.
  4. What trustee duties arise regarding verification of beneficiary consent in the disposition of trust property.

Decision

  • The court confirmed that beneficiaries with full collective ownership of the equitable interest may direct trustees regarding the trust property, including termination of the trust.
  • Unanimous, informed, and voluntary consent of all beneficiaries is required for directions to be valid.
  • The principle established by Saunders v Vautier extends to multiple-beneficiary trusts, provided consent is unanimous and beneficiaries are legally capable.
  • In cases involving complex trust structures or potential contingent/discretionary interests, all potential beneficiaries must be identified, legally capable, and unanimous for the trust to be terminated.
  • Trustees are obligated to ensure that beneficiary consent is informed, freely given, and unaffected by coercion, undue influence, or misrepresentation.

Legal Principles

  • Full collective ownership of the equitable interest empowers beneficiaries to direct trustees and terminate trusts.
  • Unanimity, legal capacity, and genuine, informed, and voluntary consent are essential for effective beneficiary instructions.
  • Trustees must confirm the validity of beneficiary consent before acting on directions.
  • The principle applies to trusts with contingent or discretionary interests if all relevant beneficiaries are capable and agree.
  • The ruling refines and extends Saunders v Vautier to apply to more complex trust arrangements.

Conclusion

Re Inns [1947] Ch 576 confirms that beneficiaries with total equitable ownership may direct trustees and terminate trusts, provided all consent genuinely and voluntarily. The decision outlines stringent requirements for consent and imposes a duty on trustees to verify its validity, serving as a key authority on trust termination and beneficiary rights.

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