April 29, 2026
In this case the Royal Court refused to bless a momentous decision of Zedra Trust Company (Isle of Man) Limited, the trustee of three family trusts (the “Trustee”): the Rhino Settlement, the Buffalo Trust, and the Giraffe Trust (the “Trusts”). The Trustee sought approval to partition the assets of the Trusts—together worth around £19 million—between A, a beneficiary in her fifties and protector of two of the Trusts, and her adult son B, also a principal beneficiary. The application arose from a severe breakdown in relations between A and B, which, in the Trustee’s view, justified a financial separation of their interests.
The Court reaffirmed that in blessing applications its role is limited, applying the three limb test in Re S Settlement and Otto Poon: namely, whether the trustee acted in good faith, whether the decision is one that a reasonable and properly instructed trustee could have reached, and whether it is untainted by conflict. Although no allegation of bad faith was made, the Court scrutinised the decision making process with care, noting the momentous nature of the proposal.
The Trustee’s plan involved dividing the liquid assets and the proceeds of sale of a valuable English property broadly equally between A and B (subject to a £2 million adjustment in B’s favour), distributing a £1 million art collection wholly to A without compensation to B, and writing off loans of approximately US$12 million and £687,000 owed by A to the trusts. A’s share was to be distributed outright, whereas B’s share was to remain in trust, with the trustee rejecting his proposal for a family investment company (FIC).
Opposition emerged from two directions. First, the guardian of C—A’s elderly mother and a discretionary beneficiary of the Rhino Settlement—objected on the basis that he had not been consulted and that C’s potential needs had not been properly assessed. This led to eleventh hour negotiations and an offer by the Trustee to ring fence £1 million for C, but there had been no formal decision on this revised proposal for the Court to bless. Second, B challenged the fairness and rationality of several aspects of the Trustee’s decision, particularly the effective favouring of A in the overall division, the uncompensated distribution of the art collection, the writing off of the substantial loans in A’s favour, and the Trustee’s refusal to consider a Family Investment Company proposal in circumstances where the Trustee itself stood to continue receiving fees if B’s assets remained in the trust structure.
The Court held that insufficient enquiries had been made regarding C’s circumstances before the decision was taken, despite the settlor’s early letter of wishes emphasising the importance of her support. The Trustee should have consulted C’s guardian well before finalising any decision. It also found that the Trustee had not properly informed itself of the origins, expectations, and terms of repayment of the loans to A, relying merely on her “impression” that they were not intended to be repaid. In the Court’s view, writing off the loans was, in economic effect, a substantial distribution to A, and the Trustee had not adequately considered compensating B for this significant benefit.
Further, the Court held that the Trustee had not properly taken into account the interests of unborn beneficiaries of the Rhino Settlement and Buffalo Trust, whose guardian ad litem raised concerns only after the decision was taken. The Court observed that the late emergence of protective mechanisms for these beneficiaries demonstrated inadequacies in the trustee’s preparatory process.
Turning to the distribution of the art collection, the Court considered it irrational to ignore its economic value entirely. A’s sentimental attachment could justify receiving the items in specie, but it could not justify treating them as irrelevant to achieving what was supposed to be a broadly equal division. The Court expressed additional concern that A had earlier removed some valuable artworks to the United States without the Trustee’s knowledge, generating possible tax liabilities.
The Court also found that the Trustee had failed to inform itself properly about B’s personal circumstances and future needs, apparently relying heavily on assertions from A, despite the conflict between them. The Trustee’s suggestion that it was typical to give a greater share to a parent than an adult child in such a partition was viewed as an unjustified generalisation that indirectly disadvantaged B, who was in a far weaker financial position than A and had received comparatively little historic benefit from the Trusts.
Finally, when considering the mechanism by which B would receive his share, the Court held that the Trustee had not adequately explored or evaluated the proposed FIC structure. The Trustee had not engaged with the safeguards offered, had not investigated the suitability of the proposed directors, and had not given weight to potential tax advantages or cost savings. Moreover, the Trustee had failed to identify or manage an apparent conflict of interest arising from the fact that retaining B’s assets within the existing Trusts meant that the Trustee would continue to earn fees.
In light of these numerous deficiencies, the Court concluded that it could not be satisfied that the Trustee’s decision met the second limb of the Otto Poon test: it was not a decision that a reasonable and properly instructed trustee could have reached. The Court therefore refused to bless the decision. It emphasised that the Trustee might still choose to proceed without court blessing but only at its own risk, or alternatively revisit the decision making process and bring a fresh application.
This judgment provides an unusually detailed roadmap of the Court’s expectations when trustees seek blessing for a momentous decision under Article 51 of the Trusts (Jersey) Law 1984. Its tone is cautionary. The Court refused the application not because the trustee lacked good faith, but because the decision making process was insufficiently robust, lacked necessary enquiries, and failed to demonstrate a balanced, fully informed evaluation of competing beneficiary interests. Trustees should therefore view this decision as a clear signal that process and evidence, not merely outcome, are decisive in blessing applications.
First, the judgment underscores the need for early and meaningful consultation with all materially affected beneficiaries, including those represented by guardians or with diminished capacity. The trustee’s failure to consult C’s guardian before reaching its decision was pivotal; late-stage remedial negotiations could not cure an originally defective process. Trustees must ensure that every person whose interests might be affected is identified, approached, and fully considered before finalising a momentous decision.
Second, the Court emphasised that trustees must be properly informed and actively gather evidence, not merely rely on informal impressions or assertions from interested parties. The trustee’s reliance on A’s “impression” concerning the non repayability of multi million dollar loans was criticised as insufficient. Likewise, the Court was troubled by the absence of independent enquiries into B’s personal circumstances and needs. Trustees must not allow one beneficiary, particularly one with structural power (such as a protector), to become the primary or sole source of information about another beneficiary.
Third, the case highlights the importance of documenting the trustee’s deliberations comprehensively. Although a separate board pack is not a strict requirement, the Court noted that its absence made it harder for the trustee to demonstrate that all relevant considerations were addressed. Trustees should expect their deliberations, reasoning, and supporting material to be scrutinised closely. Contemporaneous records, including the materials placed before decision makers, will often be critical evidence.
Fourth, the Court took a strict approach to valuation related fairness and internal consistency. Where a trustee characterises its aim as achieving a “broadly equal” division, it must take into account the economic value of all assets, even if some carry sentimental value for a beneficiary. Disregarding the economic value of nearly £1 million of art was criticised as irrational. Trustees should be wary of permitting sentimental considerations to override objective valuation unless justified and transparently balanced against other interests.
Fifth, trustees must be sensitive to potential conflicts of interest, including subtle or structural ones. The Court identified a possible conflict where rejecting B’s FIC proposal resulted in the trustee continuing to receive significant fees for trust administration. Even if the conflict is not determinative, it must be identified, evaluated, mitigated, and disclosed in evidence supporting a blessing application. The trustee’s failure to acknowledge this issue counted against it.
Sixth, the decision is a reminder that comparing beneficiaries’ historic benefits and their respective current and future needs is part of a rational decision-making process. A had received extensive historic benefits; B had received comparatively little and was much younger. The trustee’s failure to analyse these factors carefully and proportionately was criticised as a material omission.
Finally, the case stands as a warning that trustees must not assume that a partition or restructuring presented as “holistic” can excuse insufficient attention to the structure and terms of each underlying trust. The Court expected separate consideration of the rights and interests arising under each trust instrument, rather than a single global assessment that risked overlooking important distinctions.
In combination, these points reinforce that blessing applications require scrupulous preparation. Trustees must ensure that their decisions are evidence based, procedurally fair, and rationally justified. Even where the desired outcome appears sensible, such as partitioning trusts to reflect a family breakdown, the Court will not bless a decision unless the trustee can clearly demonstrate that every relevant factor has been weighed, every necessary enquiry has been made, and no material.
In this case the Royal Court refused to bless a momentous decision of Zedra Trust Company (Isle of Man) Limited, the trustee of three family trusts (the “Trustee”): the Rhino Settlement, the Buffalo Trust, and the Giraffe Trust (the “Trusts”). The Trustee sought approval to partition the assets of the Trusts—together worth around £19 million—between A, a beneficiary in her fifties and protector of two of the Trusts, and her adult son B, also a principal beneficiary. The application arose from a severe breakdown in relations between A and B, which, in the Trustee’s view, justified a financial separation of their interests.
The Court reaffirmed that in blessing applications its role is limited, applying the three limb test in Re S Settlement and Otto Poon: namely, whether the trustee acted in good faith, whether the decision is one that a reasonable and properly instructed trustee could have reached, and whether it is untainted by conflict. Although no allegation of bad faith was made, the Court scrutinised the decision making process with care, noting the momentous nature of the proposal.
The Trustee’s plan involved dividing the liquid assets and the proceeds of sale of a valuable English property broadly equally between A and B (subject to a £2 million adjustment in B’s favour), distributing a £1 million art collection wholly to A without compensation to B, and writing off loans of approximately US$12 million and £687,000 owed by A to the trusts. A’s share was to be distributed outright, whereas B’s share was to remain in trust, with the trustee rejecting his proposal for a family investment company (FIC).
Opposition emerged from two directions. First, the guardian of C—A’s elderly mother and a discretionary beneficiary of the Rhino Settlement—objected on the basis that he had not been consulted and that C’s potential needs had not been properly assessed. This led to eleventh hour negotiations and an offer by the Trustee to ring fence £1 million for C, but there had been no formal decision on this revised proposal for the Court to bless. Second, B challenged the fairness and rationality of several aspects of the Trustee’s decision, particularly the effective favouring of A in the overall division, the uncompensated distribution of the art collection, the writing off of the substantial loans in A’s favour, and the Trustee’s refusal to consider a Family Investment Company proposal in circumstances where the Trustee itself stood to continue receiving fees if B’s assets remained in the trust structure.
The Court held that insufficient enquiries had been made regarding C’s circumstances before the decision was taken, despite the settlor’s early letter of wishes emphasising the importance of her support. The Trustee should have consulted C’s guardian well before finalising any decision. It also found that the Trustee had not properly informed itself of the origins, expectations, and terms of repayment of the loans to A, relying merely on her “impression” that they were not intended to be repaid. In the Court’s view, writing off the loans was, in economic effect, a substantial distribution to A, and the Trustee had not adequately considered compensating B for this significant benefit.
Further, the Court held that the Trustee had not properly taken into account the interests of unborn beneficiaries of the Rhino Settlement and Buffalo Trust, whose guardian ad litem raised concerns only after the decision was taken. The Court observed that the late emergence of protective mechanisms for these beneficiaries demonstrated inadequacies in the trustee’s preparatory process.
Turning to the distribution of the art collection, the Court considered it irrational to ignore its economic value entirely. A’s sentimental attachment could justify receiving the items in specie, but it could not justify treating them as irrelevant to achieving what was supposed to be a broadly equal division. The Court expressed additional concern that A had earlier removed some valuable artworks to the United States without the Trustee’s knowledge, generating possible tax liabilities.
The Court also found that the Trustee had failed to inform itself properly about B’s personal circumstances and future needs, apparently relying heavily on assertions from A, despite the conflict between them. The Trustee’s suggestion that it was typical to give a greater share to a parent than an adult child in such a partition was viewed as an unjustified generalisation that indirectly disadvantaged B, who was in a far weaker financial position than A and had received comparatively little historic benefit from the Trusts.
Finally, when considering the mechanism by which B would receive his share, the Court held that the Trustee had not adequately explored or evaluated the proposed FIC structure. The Trustee had not engaged with the safeguards offered, had not investigated the suitability of the proposed directors, and had not given weight to potential tax advantages or cost savings. Moreover, the Trustee had failed to identify or manage an apparent conflict of interest arising from the fact that retaining B’s assets within the existing Trusts meant that the Trustee would continue to earn fees.
In light of these numerous deficiencies, the Court concluded that it could not be satisfied that the Trustee’s decision met the second limb of the Otto Poon test: it was not a decision that a reasonable and properly instructed trustee could have reached. The Court therefore refused to bless the decision. It emphasised that the Trustee might still choose to proceed without court blessing but only at its own risk, or alternatively revisit the decision making process and bring a fresh application.
This judgment provides an unusually detailed roadmap of the Court’s expectations when trustees seek blessing for a momentous decision under Article 51 of the Trusts (Jersey) Law 1984. Its tone is cautionary. The Court refused the application not because the trustee lacked good faith, but because the decision making process was insufficiently robust, lacked necessary enquiries, and failed to demonstrate a balanced, fully informed evaluation of competing beneficiary interests. Trustees should therefore view this decision as a clear signal that process and evidence, not merely outcome, are decisive in blessing applications.
First, the judgment underscores the need for early and meaningful consultation with all materially affected beneficiaries, including those represented by guardians or with diminished capacity. The trustee’s failure to consult C’s guardian before reaching its decision was pivotal; late-stage remedial negotiations could not cure an originally defective process. Trustees must ensure that every person whose interests might be affected is identified, approached, and fully considered before finalising a momentous decision.
Second, the Court emphasised that trustees must be properly informed and actively gather evidence, not merely rely on informal impressions or assertions from interested parties. The trustee’s reliance on A’s “impression” concerning the non repayability of multi million dollar loans was criticised as insufficient. Likewise, the Court was troubled by the absence of independent enquiries into B’s personal circumstances and needs. Trustees must not allow one beneficiary, particularly one with structural power (such as a protector), to become the primary or sole source of information about another beneficiary.
Third, the case highlights the importance of documenting the trustee’s deliberations comprehensively. Although a separate board pack is not a strict requirement, the Court noted that its absence made it harder for the trustee to demonstrate that all relevant considerations were addressed. Trustees should expect their deliberations, reasoning, and supporting material to be scrutinised closely. Contemporaneous records, including the materials placed before decision makers, will often be critical evidence.
Fourth, the Court took a strict approach to valuation related fairness and internal consistency. Where a trustee characterises its aim as achieving a “broadly equal” division, it must take into account the economic value of all assets, even if some carry sentimental value for a beneficiary. Disregarding the economic value of nearly £1 million of art was criticised as irrational. Trustees should be wary of permitting sentimental considerations to override objective valuation unless justified and transparently balanced against other interests.
Fifth, trustees must be sensitive to potential conflicts of interest, including subtle or structural ones. The Court identified a possible conflict where rejecting B’s FIC proposal resulted in the trustee continuing to receive significant fees for trust administration. Even if the conflict is not determinative, it must be identified, evaluated, mitigated, and disclosed in evidence supporting a blessing application. The trustee’s failure to acknowledge this issue counted against it.
Sixth, the decision is a reminder that comparing beneficiaries’ historic benefits and their respective current and future needs is part of a rational decision-making process. A had received extensive historic benefits; B had received comparatively little and was much younger. The trustee’s failure to analyse these factors carefully and proportionately was criticised as a material omission.
Finally, the case stands as a warning that trustees must not assume that a partition or restructuring presented as “holistic” can excuse insufficient attention to the structure and terms of each underlying trust. The Court expected separate consideration of the rights and interests arising under each trust instrument, rather than a single global assessment that risked overlooking important distinctions.
In combination, these points reinforce that blessing applications require scrupulous preparation. Trustees must ensure that their decisions are evidence based, procedurally fair, and rationally justified. Even where the desired outcome appears sensible, such as partitioning trusts to reflect a family breakdown, the Court will not bless a decision unless the trustee can clearly demonstrate that every relevant factor has been weighed, every necessary enquiry has been made, and no material.
In this case the Royal Court refused to bless a momentous decision of Zedra Trust Company (Isle of Man) Limited, the trustee of three family trusts (the “Trustee”): the Rhino Settlement, the Buffalo Trust, and the Giraffe Trust (the “Trusts”). The Trustee sought approval to partition the assets of the Trusts—together worth around £19 million—between A, a beneficiary in her fifties and protector of two of the Trusts, and her adult son B, also a principal beneficiary. The application arose from a severe breakdown in relations between A and B, which, in the Trustee’s view, justified a financial separation of their interests.
The Court reaffirmed that in blessing applications its role is limited, applying the three limb test in Re S Settlement and Otto Poon: namely, whether the trustee acted in good faith, whether the decision is one that a reasonable and properly instructed trustee could have reached, and whether it is untainted by conflict. Although no allegation of bad faith was made, the Court scrutinised the decision making process with care, noting the momentous nature of the proposal.
The Trustee’s plan involved dividing the liquid assets and the proceeds of sale of a valuable English property broadly equally between A and B (subject to a £2 million adjustment in B’s favour), distributing a £1 million art collection wholly to A without compensation to B, and writing off loans of approximately US$12 million and £687,000 owed by A to the trusts. A’s share was to be distributed outright, whereas B’s share was to remain in trust, with the trustee rejecting his proposal for a family investment company (FIC).
Opposition emerged from two directions. First, the guardian of C—A’s elderly mother and a discretionary beneficiary of the Rhino Settlement—objected on the basis that he had not been consulted and that C’s potential needs had not been properly assessed. This led to eleventh hour negotiations and an offer by the Trustee to ring fence £1 million for C, but there had been no formal decision on this revised proposal for the Court to bless. Second, B challenged the fairness and rationality of several aspects of the Trustee’s decision, particularly the effective favouring of A in the overall division, the uncompensated distribution of the art collection, the writing off of the substantial loans in A’s favour, and the Trustee’s refusal to consider a Family Investment Company proposal in circumstances where the Trustee itself stood to continue receiving fees if B’s assets remained in the trust structure.
The Court held that insufficient enquiries had been made regarding C’s circumstances before the decision was taken, despite the settlor’s early letter of wishes emphasising the importance of her support. The Trustee should have consulted C’s guardian well before finalising any decision. It also found that the Trustee had not properly informed itself of the origins, expectations, and terms of repayment of the loans to A, relying merely on her “impression” that they were not intended to be repaid. In the Court’s view, writing off the loans was, in economic effect, a substantial distribution to A, and the Trustee had not adequately considered compensating B for this significant benefit.
Further, the Court held that the Trustee had not properly taken into account the interests of unborn beneficiaries of the Rhino Settlement and Buffalo Trust, whose guardian ad litem raised concerns only after the decision was taken. The Court observed that the late emergence of protective mechanisms for these beneficiaries demonstrated inadequacies in the trustee’s preparatory process.
Turning to the distribution of the art collection, the Court considered it irrational to ignore its economic value entirely. A’s sentimental attachment could justify receiving the items in specie, but it could not justify treating them as irrelevant to achieving what was supposed to be a broadly equal division. The Court expressed additional concern that A had earlier removed some valuable artworks to the United States without the Trustee’s knowledge, generating possible tax liabilities.
The Court also found that the Trustee had failed to inform itself properly about B’s personal circumstances and future needs, apparently relying heavily on assertions from A, despite the conflict between them. The Trustee’s suggestion that it was typical to give a greater share to a parent than an adult child in such a partition was viewed as an unjustified generalisation that indirectly disadvantaged B, who was in a far weaker financial position than A and had received comparatively little historic benefit from the Trusts.
Finally, when considering the mechanism by which B would receive his share, the Court held that the Trustee had not adequately explored or evaluated the proposed FIC structure. The Trustee had not engaged with the safeguards offered, had not investigated the suitability of the proposed directors, and had not given weight to potential tax advantages or cost savings. Moreover, the Trustee had failed to identify or manage an apparent conflict of interest arising from the fact that retaining B’s assets within the existing Trusts meant that the Trustee would continue to earn fees.
In light of these numerous deficiencies, the Court concluded that it could not be satisfied that the Trustee’s decision met the second limb of the Otto Poon test: it was not a decision that a reasonable and properly instructed trustee could have reached. The Court therefore refused to bless the decision. It emphasised that the Trustee might still choose to proceed without court blessing but only at its own risk, or alternatively revisit the decision making process and bring a fresh application.
This judgment provides an unusually detailed roadmap of the Court’s expectations when trustees seek blessing for a momentous decision under Article 51 of the Trusts (Jersey) Law 1984. Its tone is cautionary. The Court refused the application not because the trustee lacked good faith, but because the decision making process was insufficiently robust, lacked necessary enquiries, and failed to demonstrate a balanced, fully informed evaluation of competing beneficiary interests. Trustees should therefore view this decision as a clear signal that process and evidence, not merely outcome, are decisive in blessing applications.
First, the judgment underscores the need for early and meaningful consultation with all materially affected beneficiaries, including those represented by guardians or with diminished capacity. The trustee’s failure to consult C’s guardian before reaching its decision was pivotal; late-stage remedial negotiations could not cure an originally defective process. Trustees must ensure that every person whose interests might be affected is identified, approached, and fully considered before finalising a momentous decision.
Second, the Court emphasised that trustees must be properly informed and actively gather evidence, not merely rely on informal impressions or assertions from interested parties. The trustee’s reliance on A’s “impression” concerning the non repayability of multi million dollar loans was criticised as insufficient. Likewise, the Court was troubled by the absence of independent enquiries into B’s personal circumstances and needs. Trustees must not allow one beneficiary, particularly one with structural power (such as a protector), to become the primary or sole source of information about another beneficiary.
Third, the case highlights the importance of documenting the trustee’s deliberations comprehensively. Although a separate board pack is not a strict requirement, the Court noted that its absence made it harder for the trustee to demonstrate that all relevant considerations were addressed. Trustees should expect their deliberations, reasoning, and supporting material to be scrutinised closely. Contemporaneous records, including the materials placed before decision makers, will often be critical evidence.
Fourth, the Court took a strict approach to valuation related fairness and internal consistency. Where a trustee characterises its aim as achieving a “broadly equal” division, it must take into account the economic value of all assets, even if some carry sentimental value for a beneficiary. Disregarding the economic value of nearly £1 million of art was criticised as irrational. Trustees should be wary of permitting sentimental considerations to override objective valuation unless justified and transparently balanced against other interests.
Fifth, trustees must be sensitive to potential conflicts of interest, including subtle or structural ones. The Court identified a possible conflict where rejecting B’s FIC proposal resulted in the trustee continuing to receive significant fees for trust administration. Even if the conflict is not determinative, it must be identified, evaluated, mitigated, and disclosed in evidence supporting a blessing application. The trustee’s failure to acknowledge this issue counted against it.
Sixth, the decision is a reminder that comparing beneficiaries’ historic benefits and their respective current and future needs is part of a rational decision-making process. A had received extensive historic benefits; B had received comparatively little and was much younger. The trustee’s failure to analyse these factors carefully and proportionately was criticised as a material omission.
Finally, the case stands as a warning that trustees must not assume that a partition or restructuring presented as “holistic” can excuse insufficient attention to the structure and terms of each underlying trust. The Court expected separate consideration of the rights and interests arising under each trust instrument, rather than a single global assessment that risked overlooking important distinctions.
In combination, these points reinforce that blessing applications require scrupulous preparation. Trustees must ensure that their decisions are evidence based, procedurally fair, and rationally justified. Even where the desired outcome appears sensible, such as partitioning trusts to reflect a family breakdown, the Court will not bless a decision unless the trustee can clearly demonstrate that every relevant factor has been weighed, every necessary enquiry has been made, and no material.
In this case the Royal Court refused to bless a momentous decision of Zedra Trust Company (Isle of Man) Limited, the trustee of three family trusts (the “Trustee”): the Rhino Settlement, the Buffalo Trust, and the Giraffe Trust (the “Trusts”). The Trustee sought approval to partition the assets of the Trusts—together worth around £19 million—between A, a beneficiary in her fifties and protector of two of the Trusts, and her adult son B, also a principal beneficiary. The application arose from a severe breakdown in relations between A and B, which, in the Trustee’s view, justified a financial separation of their interests.
The Court reaffirmed that in blessing applications its role is limited, applying the three limb test in Re S Settlement and Otto Poon: namely, whether the trustee acted in good faith, whether the decision is one that a reasonable and properly instructed trustee could have reached, and whether it is untainted by conflict. Although no allegation of bad faith was made, the Court scrutinised the decision making process with care, noting the momentous nature of the proposal.
The Trustee’s plan involved dividing the liquid assets and the proceeds of sale of a valuable English property broadly equally between A and B (subject to a £2 million adjustment in B’s favour), distributing a £1 million art collection wholly to A without compensation to B, and writing off loans of approximately US$12 million and £687,000 owed by A to the trusts. A’s share was to be distributed outright, whereas B’s share was to remain in trust, with the trustee rejecting his proposal for a family investment company (FIC).
Opposition emerged from two directions. First, the guardian of C—A’s elderly mother and a discretionary beneficiary of the Rhino Settlement—objected on the basis that he had not been consulted and that C’s potential needs had not been properly assessed. This led to eleventh hour negotiations and an offer by the Trustee to ring fence £1 million for C, but there had been no formal decision on this revised proposal for the Court to bless. Second, B challenged the fairness and rationality of several aspects of the Trustee’s decision, particularly the effective favouring of A in the overall division, the uncompensated distribution of the art collection, the writing off of the substantial loans in A’s favour, and the Trustee’s refusal to consider a Family Investment Company proposal in circumstances where the Trustee itself stood to continue receiving fees if B’s assets remained in the trust structure.
The Court held that insufficient enquiries had been made regarding C’s circumstances before the decision was taken, despite the settlor’s early letter of wishes emphasising the importance of her support. The Trustee should have consulted C’s guardian well before finalising any decision. It also found that the Trustee had not properly informed itself of the origins, expectations, and terms of repayment of the loans to A, relying merely on her “impression” that they were not intended to be repaid. In the Court’s view, writing off the loans was, in economic effect, a substantial distribution to A, and the Trustee had not adequately considered compensating B for this significant benefit.
Further, the Court held that the Trustee had not properly taken into account the interests of unborn beneficiaries of the Rhino Settlement and Buffalo Trust, whose guardian ad litem raised concerns only after the decision was taken. The Court observed that the late emergence of protective mechanisms for these beneficiaries demonstrated inadequacies in the trustee’s preparatory process.
Turning to the distribution of the art collection, the Court considered it irrational to ignore its economic value entirely. A’s sentimental attachment could justify receiving the items in specie, but it could not justify treating them as irrelevant to achieving what was supposed to be a broadly equal division. The Court expressed additional concern that A had earlier removed some valuable artworks to the United States without the Trustee’s knowledge, generating possible tax liabilities.
The Court also found that the Trustee had failed to inform itself properly about B’s personal circumstances and future needs, apparently relying heavily on assertions from A, despite the conflict between them. The Trustee’s suggestion that it was typical to give a greater share to a parent than an adult child in such a partition was viewed as an unjustified generalisation that indirectly disadvantaged B, who was in a far weaker financial position than A and had received comparatively little historic benefit from the Trusts.
Finally, when considering the mechanism by which B would receive his share, the Court held that the Trustee had not adequately explored or evaluated the proposed FIC structure. The Trustee had not engaged with the safeguards offered, had not investigated the suitability of the proposed directors, and had not given weight to potential tax advantages or cost savings. Moreover, the Trustee had failed to identify or manage an apparent conflict of interest arising from the fact that retaining B’s assets within the existing Trusts meant that the Trustee would continue to earn fees.
In light of these numerous deficiencies, the Court concluded that it could not be satisfied that the Trustee’s decision met the second limb of the Otto Poon test: it was not a decision that a reasonable and properly instructed trustee could have reached. The Court therefore refused to bless the decision. It emphasised that the Trustee might still choose to proceed without court blessing but only at its own risk, or alternatively revisit the decision making process and bring a fresh application.
This judgment provides an unusually detailed roadmap of the Court’s expectations when trustees seek blessing for a momentous decision under Article 51 of the Trusts (Jersey) Law 1984. Its tone is cautionary. The Court refused the application not because the trustee lacked good faith, but because the decision making process was insufficiently robust, lacked necessary enquiries, and failed to demonstrate a balanced, fully informed evaluation of competing beneficiary interests. Trustees should therefore view this decision as a clear signal that process and evidence, not merely outcome, are decisive in blessing applications.
First, the judgment underscores the need for early and meaningful consultation with all materially affected beneficiaries, including those represented by guardians or with diminished capacity. The trustee’s failure to consult C’s guardian before reaching its decision was pivotal; late-stage remedial negotiations could not cure an originally defective process. Trustees must ensure that every person whose interests might be affected is identified, approached, and fully considered before finalising a momentous decision.
Second, the Court emphasised that trustees must be properly informed and actively gather evidence, not merely rely on informal impressions or assertions from interested parties. The trustee’s reliance on A’s “impression” concerning the non repayability of multi million dollar loans was criticised as insufficient. Likewise, the Court was troubled by the absence of independent enquiries into B’s personal circumstances and needs. Trustees must not allow one beneficiary, particularly one with structural power (such as a protector), to become the primary or sole source of information about another beneficiary.
Third, the case highlights the importance of documenting the trustee’s deliberations comprehensively. Although a separate board pack is not a strict requirement, the Court noted that its absence made it harder for the trustee to demonstrate that all relevant considerations were addressed. Trustees should expect their deliberations, reasoning, and supporting material to be scrutinised closely. Contemporaneous records, including the materials placed before decision makers, will often be critical evidence.
Fourth, the Court took a strict approach to valuation related fairness and internal consistency. Where a trustee characterises its aim as achieving a “broadly equal” division, it must take into account the economic value of all assets, even if some carry sentimental value for a beneficiary. Disregarding the economic value of nearly £1 million of art was criticised as irrational. Trustees should be wary of permitting sentimental considerations to override objective valuation unless justified and transparently balanced against other interests.
Fifth, trustees must be sensitive to potential conflicts of interest, including subtle or structural ones. The Court identified a possible conflict where rejecting B’s FIC proposal resulted in the trustee continuing to receive significant fees for trust administration. Even if the conflict is not determinative, it must be identified, evaluated, mitigated, and disclosed in evidence supporting a blessing application. The trustee’s failure to acknowledge this issue counted against it.
Sixth, the decision is a reminder that comparing beneficiaries’ historic benefits and their respective current and future needs is part of a rational decision-making process. A had received extensive historic benefits; B had received comparatively little and was much younger. The trustee’s failure to analyse these factors carefully and proportionately was criticised as a material omission.
Finally, the case stands as a warning that trustees must not assume that a partition or restructuring presented as “holistic” can excuse insufficient attention to the structure and terms of each underlying trust. The Court expected separate consideration of the rights and interests arising under each trust instrument, rather than a single global assessment that risked overlooking important distinctions.
In combination, these points reinforce that blessing applications require scrupulous preparation. Trustees must ensure that their decisions are evidence based, procedurally fair, and rationally justified. Even where the desired outcome appears sensible, such as partitioning trusts to reflect a family breakdown, the Court will not bless a decision unless the trustee can clearly demonstrate that every relevant factor has been weighed, every necessary enquiry has been made, and no material.