The rule in Saunders v Vautier: to the ‘residuary beneficiary’, the spoils?

Abstract

The Royal Court of Guernsey was recently called upon to interpret Guernsey’s statutory incarnation of the rule in Saunders v Vautier in order to decide whether the sole beneficiary of a discretionary trust was entitled to collapse the trust and have the property distributed to it notwithstanding that, as a result of the trustee’s wide powers to appoint additional beneficiaries, it could be argued that the class of objects was not closed. The Royal Court held that the beneficiary could collapse the trust in those circumstances. This article considers the potential impact of this decision, particularly for ‘Red Cross’ trusts in Guernsey and beyond.