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Contesting the ‘real’ purpose of the trust

When trustees want to favour a particular beneficiary, they will sometimes justify this by calling that person the ‘primary beneficiary’. The ‘real’ purpose of the trust, they will say, was to look after that person.

Here’s what the Court of Appeal had to say about this sort of thing:

…[The trustees] cannot disregard the express terms of the Trust Deed and treat Ms Jamieson as the primary beneficiary and Mrs Addleman as nothing more than a backstop beneficiary … *

How do you win an argument about the ‘real’ purpose of the Trust?

This is a complex question, but the first line of defence may be the trust deed itself.

Have a look at your trust deed.

Chances are, the named beneficiaries will seem like they are on more or less the same footing - at least if you go by the document itself.

* Addleman v Lambie Trustee Limited [2019] NZCA 480

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