The England and Wales High Court (EWHC) has dismissed a man’s attempt to exclude his brother from a family trust set up by their late father, as reported by STEP.
The dispute arose after Jonathan Marcus sought to remove his brother, Edward Marcus, as a beneficiary of a trust created in 2003 by their legal father, referred to as “the deceased.”
The trust, known as a ‘Son of Melville’ arrangement, aimed to defer capital gains tax and named ‘the children and remoter issue’ of the settlor as discretionary beneficiaries. Both brothers were raised believing they were biological siblings. However, in 2010, their mother revealed to Edward that the deceased was not his biological father. Jonathan only learned this in May 2023, three years after their father’s death in 2020. By that time, the brothers had already fallen out, with Edward previously launching legal action to remove Jonathan as a trustee of the family’s two trusts, a matter that concluded in 2022 with a court-ordered appointment of independent trustees.
Jonathan then initiated legal proceedings, arguing that Edward should be removed as a beneficiary since he was not the deceased’s biological child. Edward contended that the term ‘children’ in the trust included both brothers, regardless of biological ties.
The EWHC ruled that although Edward was likely not the deceased’s biological son, the term ‘children’ in the trust deed was intended to include both Jonathan and Edward. The court found that a reasonable person with knowledge of the facts would understand that the deceased’s use of ‘children’ was meant to refer to both men, regardless of biological paternity.
The court also noted that there was no indication the deceased intended to treat the brothers unequally, adding that such an interpretation would lead to an unjust imbalance between the two settlements.
(Marcus v Marcus, 2024 EWHC 2086 Ch).
