Ramus v Holt: can the identity of the trustees affect what is reasonable provision?

Insight

28.09.2022

Mr and Mrs Ramus had been married for 48 years by the time of Mr Ramus’ death in 2020. However their marriage had broken down shortly before Mr Ramus died and they were living separately.

By Mr Ramus’s will the residuary estate was to be held on life interest trust for Mrs Ramus with a power to apply capital for her benefit. The trustees also had a power to terminate the life interest. Subject to the life interest, the trust fund was to be held on flexible discretionary trusts for a class of "Discretionary Beneficiaries" including Mr Ramus’s children and remoter issue and Mrs Ramus (but subject to the trustees’ power to exclude her from benefit).

Mrs Ramus was concerned as her daughter, Mrs Holt, with whom she had fallen out, was one of the three trustees appointed under the will. The other two trustees were long standing friends of the deceased, both with professional expertise relevant to their role as trustees. Mrs Ramus was concerned that the trustees had power to terminate the payment of income to her and could refuse to advance any capital.

She therefore sought reasonable financial provision from the estate under the Inheritance (Provision for Family and Dependants) Act 1975. She argued that reasonable provision would be achieved by:

an order amending the terms of the trust to remove the discretion afforded to the trustees to remove her as income beneficiary and either an order,
to award her a minimum fixed sum from the trust each month (to increase with inflation), or
to replace the trustees with new trustees agreed between the parties or appointed by the court.

The court refused to make the order. It found that the disposition under the will made reasonable provision for Mrs Ramus – substantially in excess of what she might receive to meet her needs on a Duxbury basis.

Further, the trustees could only exercise their power of termination of the life interest if they unanimously decided to do so. Mrs Holt alone could not prevent her mother from receiving the trust income. It was clear to the Judge that the other trustees were not in any sense "in thrall" to Mrs Holt and that "reasonable financial provision from the estate of the deceased does not become unreasonable financial provision because of the identity of the trustees".

In terms of the suggestion that the Court should replace the trustees, the Judge found that the court had no power to remove the trustees of an existing settlement under the Act and that reading such a power into the Act would undermine the law concerning the removal of trustees and other statutory provisions in the area.

A link to the judgment can be found here.

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This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.