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Setting up family trusts with minors or those with mental incapacities as beneficiaries is by no means uncommon and it sometimes occurs that such trusts need to be varied for one reason or another. The mechanism for this is the Variation of Trusts Act 1958, which allows the beneficiaries of a trust to vary its terms if they all agree. Where a beneficiary is unable to give such agreement (as is the case for minors and those with a mental incapacity), the variation must be referred to the court.
A recent case, involving a trust of which a minor with severe autism is a beneficiary, led to an interesting question. When the variation of the trust was to be approved, should it be the Court of Protection (CoP) or the High Court that made the decision? When a decision is made for someone lacking mental capacity, the CoP would be the appropriate forum. However, would the decision of the CoP then have to be referred back to the High Court for approval to be given for the variation of the trust?
A judge who sits in both the High Court and the CoP reviewed the legislation and concluded that 'in the case of a beneficiary who is under 18, the question as to whether the proposed variation is for his benefit will always be a matter for the High Court'.