“Beneficiaries cannot compel trustees to disclose reasons for exercising discretionary powers.”
Under the Londonderry Settlement, trustees had discretionary power to distribute income and capital among beneficiaries. Some beneficiaries sought disclosure of documents showing the trustees' reasons for their decisions and the factors they considered when exercising their discretion.
Whether beneficiaries are entitled to disclosure of trustees' reasons for exercising discretionary powers and related documents showing the decision-making process.
The Court of Appeal held that beneficiaries have no right to see documents relating to trustees' exercise of discretion or to compel trustees to give reasons for their decisions.
This case established a fundamental principle of trust law that protects trustees' discretionary decision-making from scrutiny. It remains the leading authority on beneficiaries' rights to information about discretionary trusts. The principle is crucial for modern discretionary trust practice and wealth management.
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OSCOLA Citation
Re Londonderry's Settlement [1965] Ch 918
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