The Advantage of a Gift Over Provision in a Trust Fund

During the 1820s, a rich British investor named Richard Wright set up a trust fund with 2,000 pounds worth of East India Company common stock, worth approximately $4.8 million in current U.S. dollars, in a trust fund for his great-nephew Daniel Vautier. The trust instrument stated that all the proceeds would be paid out when he was 25, and the trust would terminate at that time.

When Vautier turned 21, he petitioned the trustee to terminate the trust and either give all the East India stock to him, or liquidate it and give them the proceeds. It posed a fascinating legal question: “If the sole beneficiary consents to termination of the trust, but that is not what the settlor wanted, what prevails?”

The Judge, Lord Cottingham, argued that the desires of the living supersede those of the deceased: “I think that principal has been repeatedly acted upon; and where a … Read the rest of this article!