Examination Timing: 00H00M22S
Anna establishes a trust in her will, leaving a significant amount of assets on trust for her children and grandchildren living at the time of the execution of the trust in order to provide for their education. Tragically, one Christmas, her entire family is travelling to visit her and they are all killed in an accident. She is left with no children or grandchildren. Which of the following statements best describes the position?
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Your selected option: A
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The correct answer is A. As the trust was made in favour of a defined list of beneficiaries (Anna's children and grandchildren), once these beneficiaries are no longer living, the objects of the trust have been exhausted. Consequently, the property will remain in the legal ownership of the trustees, but they will hold it on a resulting trust for Anna. This means the trust property reverts to Anna because the purpose of the trust has failed.
Key Point: When the beneficiaries of a trust are exhausted or the purpose of the trust fails, the property reverts to the settlor (or their estate) under a resulting trust.
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