Absent an effective device in a will to delay distribution, a beneficiary can usually call for their share of estate proceeds upon them attaining majority – ie from their 18th birthday – even if the will specifies a later date.
Chloe Fahey had been 2 years old when her grandmother Pauline Tyson, died in Melbourne in December 2003.
Her son Howard Bird was granted probate of the will which among other things left the residue of $332k to be shared equally between him and his niece Chloe.
Chloe’s share was to be held by Howard in trust and paid to her “upon her attaining the age of twenty one years”.
His 2004 application for probate had been accompanied by his affidavit whereby he undertook to “well and truly collect and administer the estate”, and file a true and just account of the estate’s administration with the court if required by the registrar.
The will gave Howard power to apply funds in Chloe’s trust towards her “maintenance, education and advancement” until she turned 21, and also directed Howard to invest Chloe’s trust funds in specified allowable investments.
After turning 18 during the height of the COVID pandemic in 2020, Chloe attempted to contact Howard to obtain details of the fund, how it had been invested, and what was its current balance.
Despite persistent attempts to make contact – 3 times a week over six weeks at one point – Howard never responded.
Chloe then instructed solicitors who wrote to Howard to inform him of her severe financial circumstances and to request that her full entitlement be paid to their trust account within 7 days accompanied by financial statements for the duration of the trust.
As he was equally unresponsive them, the solicitors then asked the Probate Registrar of the Victorian Supreme Court to intervene.
The Registry contacted Howard by mail and email requiring him to provide a just a true account of the estate within 30 days. This request was also ignored.
Having exhausted all other avenues, Chloe applied to the court for orders that Howard provide a full accounting, declare her trust as terminated, and for Howard to transfer all trust property to Chloe immediately.
Associate Judge Nemeer Mukhtar ruled that as Chloe was the only beneficiary, the “21 years” age qualification could not make the gift “conditional” on her turning 21. Rather, it should be treated as a mere preference as to when Chloe should receive it.
By operation of what is known as “the rule in Saunders v Vautier“, she was entitled – as an adult – to call for the benefit to be paid immediately.
There were no “special circumstances” or other conduct that might justify a refusal to bring the trust to an end.
The orders sought by Chloe were made by the judge who observed that there was no indication as to why Howard had been unresponsive, but his lack of response was “concerning” and perhaps portending the funds might have been “compromised or mishandled”.
It is not known if Mr Bird has complied with the orders.