“Discretionary trusts valid if clear cases identifiable despite uncertain borderline cases.”
A settlement created a discretionary trust for 'relatives' and 'dependants' of employees of a company. The trustees sought directions on whether the trust was valid given the potential uncertainty in identifying all possible beneficiaries within these categories.
What is the test for certainty of objects in discretionary trusts, and are the terms 'relatives' and 'dependants' sufficiently certain?
The Court of Appeal held the trust was valid. The 'is or is not' test applied - it was sufficient that clear cases could be identified within each category, even if borderline cases might be uncertain.
This case clarified the McPhail v Doulton test and made discretionary trusts easier to establish by accepting that some uncertainty at the margins does not invalidate clearly defined core categories. It remains the leading authority on certainty of objects and is essential for understanding modern trust law.
You're reading the free summary of Re Baden's Deed Trusts (No 2). Create a free account to unlock the full reasoning, the cited authorities and the verbatim judgment — plus structured briefs for 412,000+ UK judgments.
No card required. Free forever.
OSCOLA Citation
Re Baden's Deed Trusts (No 2) [1973] Ch 9
Multiple official and mirror sources — pick whichever loads cleanly on your network.
Falls back to Google for old citations BAILII catalogues separately
Common Room
0 comments · About the Common Room →
No comments yet — start the discussion.
Voted-best comments help future students and feed Caselaw's AI study tools.