Testamentary Trust? All my worldly goods to my ex wife who will distribute it to my children as she sees fit

Rhodes v Rhodes (as Executor of the Will of Cecil Ronald Rhodes) & Ors [2017] QSC 21

Henry J

The present application concerned the construction and effect of the deceased’s testamentary disposition. The pro forma will left the deceased’s estate in the following terms:

All my worldly goods to my ex wife who will distribute it to my children as she sees fit.

The deceased’s ex wife and children were the respondents to an application filed by the applicant, the deceased’s son, who sought orders, inter alia, appointing him as administrator pending disposition of the application and removing his brother as executor of the estate.

By way of background, his Honour noted:

[7] The genesis of the controversy apparently provoking the application lies in part in Cecil and Rita not having fully implemented a Family Court consent order requiring Rita and Cecil to transfer certain properties, which had been jointly owned by each of them, to one or the other of them.  The consent order was made on 29 August 2005, well before the date on which Cecil executed his will, 12 January 2010.

[13] In light of that background it is a matter of potentially determinative importance whether the will’s effect was to gift the residue of the estate to Rita absolutely or to create a testamentary trust in favour of the deceased’s children.  If the latter, then the debate about which interests in the above-mentioned properties form part of the deceased’s estate and Rita’s assumption of ownership of some of those properties since the deceased’s death is a live issue for determination in the application…

Henry J presented the question for determination as:

[14] …The question whether the residuary estate of the late Cecil Ronald Rhodes (“the Deceased”) was gifted to the Second Respondent absolutely or whether it was subject to a testamentary trust in favour of the Applicant and the Third Respondents pursuant to the Will of Deceased dated 12 January 2010…

Consideration

Finding that the residuary estate of the deceased was gifted to the second respondent subject to a testamentary trust in favour of the applicant and the third respondents, his Honour reasoned as follows:

[20] … Firstly, notwithstanding Cecil’s choice of the Residuary Estate clause as the location to insert the words in issue, it is obvious he intended his words to dispose of the whole of his estate.  Bearing in mind there was no other dispositive clause written in by him it is uncontroversial his reference to “all my worldly goods” embraced all his property, both real and personal.

[21] Secondly, it is clear Cecil’s words do not flow on in neat completion of the sentence begun with the typewritten Residuary Estate clause commencing “I give”… Given the words Cecil wrote after the typewritten commencement of the clause, their placement means no more than that Cecil meant to indicate which beneficiary or beneficiaries he was intending to gift his estate to. That is to say nothing of whether he intended to do so by the mechanism of an absolute gift or a trust.

His Honour restated that no special words are required to create a trust at [22] and then went on to consider the language in the deceased’s will:

[23] … if he was intending to gift his estate to Rita absolutely it is curious he would add reference to his children and to Rita distributing the estate to them.  In considering whether such additional language bespeaks an intention to create a trust the main question is “whether there is something imperative in the will, something which requires that something should be done”.

[27] … the words, “who will distribute it to my children” (emphasis added), is significant.  Those words have an imperative quality. They are inconsistent with a mere indication of purpose or motive for benefiting Rita, indeed they are inconsistent with an intention to benefit Rita at all. The word “will” in this context bespeaks obligation rather than choice. It conveys that distribution is mandatory, so that Rita must distribute the residue to Cecil’s children.

[30] … The ordinary and natural meaning of the combination of words chosen by Cecil is that the words “as she sees fit” go to when and in what proportions Rita “sees fit” to distribute the estate to Cecil’s children and do not override the mandatory requirement that she “will” distribute…

[31] I find Cecil’s words bespeak a requirement, not merely a hope, that Rita will distribute his estate to his children.

Henry J found that the estate was gifted to the second respondent subject to a testamentary trust in favour of the applicant and the third respondents.

David Cormack – Brisbane Barrister & Mediator

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