The rule in Saunders v Vautier
When an inheritance passes sooner than expected
Sometimes, a will sets up a testamentary trust—a trust that starts after someone passes away. This can be used to:
Delay giving a gift until the beneficiary reaches a certain age.
Provide income over time instead of giving access to the full amount.
But there’s a catch...
The rule in Saunders v Vautier: What It Means
The rule established in Saunders v Vautier [1841] EWHC is a fundamental principle of English trust law and upholds the principle that the beneficiaries, as the ultimate owners of the trust property, have the right to decide what happens to it.
The rule applies if:
All beneficiaries are adults and legally capable.
All beneficiaries are clearly entitled to the trust property (no unborn or uncertain beneficiaries).
If these conditions are met, the beneficiaries can end the trust and take the assets.
How a Discretionary Testamentary Trust Helps
A discretionary testamentary trust gives the trustee the power to decide:
Who gets what.
When they get it.
How much they get.
This means beneficiaries don’t have a guaranteed share—they just have a chance of receiving something.
Why this matters:
Since beneficiaries don’t have fixed rights, they can’t demand the trust be ended under the Saunders v Vautier rule.
The trustee’s discretion protects the trust from being wound up early.
When Could the Rule Still Apply?
In rare cases, the rule might still apply if:
The group of beneficiaries is fixed (no new or unborn members).
All beneficiaries are adults and legally capable.
They all agree to end the trust.
But in practice, this is very unlikely because:
Most discretionary trusts include a wide range of possible beneficiaries.
Some may be unborn or not yet identified.
Summary
The Saunders v Vautier rule gives beneficiaries the power to end a trust—but only if they all qualify and agree.
A discretionary testamentary trust makes this very difficult, because:
Beneficiaries don’t have fixed rights.
The trustee controls how the trust is used.
The group of beneficiaries is usually open and changing.
So, while it’s technically possible to apply the rule, it’s rare and impractical in most discretionary testamentary trusts.
Recent cases applying the rule in Saunders v Vautier
Brooks v Brooks [2024] SASC 82 concerned an application by the beneficiaries of a testamentary trust (Joseph and Jason Brooks) to wind up the trust and distribute its assets to them before the date specified in the trust instrument.
In this case, the Court considered whether the rule should be applied, given:
Both primary beneficiaries were adults and sui juris.
They were unanimous in seeking early vesting.
The contingent beneficiary (their father) consented to the early distribution, thereby relinquishing his contingent interest.
The Court found that all criteria for the application of the rule were satisfied. The case was a clear application of the rule in Saunders v Vautier, demonstrating that where all beneficiaries (including contingent beneficiaries) are adults, ascertained, and unanimous, they may require the trust to be wound up and the assets distributed, even if the trust instrument provides for a later vesting date.
The Court’s decision also emphasised the importance of the beneficiaries’ wishes and the need to ensure that the interests of all actual and potential beneficiaries are properly represented and protected
