Does your trust deed include your adopted kids?
In 1953 Mr Druiff (the donor) created a trust deed for the benefit of his four children and failing them, his grandchildren.
Ms Harper, one of Druiff’s children, was unable to have any children of her own and adopted two children.
Harper approached the Western Cape Division of the High Court for confirmation as to whether her adoptive children fell within the interpretation of the words “children”, “descendants”, “issue” and “legal descendant” found in the trust deed.
Harper stated that she had told her father that she was considering adoption. She argued that to exclude her adopted children would amount to unfair discrimination on the basis of their birth.
The High Court examined the ordinary meaning of the words read with the trust deed as a whole and in the context within which it was drafted and concluded that the donor was aware Harper may adopt and could have included adopted children as beneficiaries if he wished.
Harper’s quarter-share would thus devolve to her nephews (the donor’s biological descendants) and not her adopted children.
Harper subsequently died and the decision by the High Court was taken on appeal by her executor.
The SCA highlighted the fact that freedom of testation flows from one’s right to dignity, which enables the individual to dispose of his property as he sees fit and chooses to his beneficiaries.
The courts are reluctant to intervene and vary a trust deed unless the provision in question brings about a consequence the donor did not contemplate or foresee.
The provision must either hamper the objective of the trust, prejudice the interests of the beneficiaries or be against public policy.
By a majority decision, the court found that it was clear that the donor intended to provide his children with income from the trust and capital to their biological descendants.
The appeal was dismissed.
To avoid uncertainty and the possibility of future conflict we strongly recommend that your trust deed and will be drawn or reviewed by a professional to ensure that your intentions are expressed clearly.
Mike Nolan and Claudia Harris work in the trusts and estates department at Livingstone Liandry.
The views expressed in this column do not necessarily reflect the views of Independent Media.