Question
The Burns Family Trust was settled by Mr Burns in 2017 and was to be managed in accordance with the trust deed. Ned and Smithers
The Burns Family Trust was settled by Mr Burns in 2017 and was to be managed in accordance with the trust deed. Ned and Smithers are the trustees. The trust property consists of real and personal property. The deed provides that each year, income earned from the capital is to be paid equally between three beneficiaries, Bart, Lisa and Maggie. All are above 18 years of age. The trust fund earned dividends in 2018, 2019, and 2020. No distributions were made in 2018 or 2019.
Mr Burn's favourite niece is Lisa, Mr Burns instructs Ned to pay Lisa more money. In 2020, Ned pays Lisa three quarters of the total dividends paid to the trust, in order to help her with her university studies. He tells her not to tell the others. Lisa gets drunk at a party and tells Millhouse, Bart's best friend. Millhouse tells Bart about the money.
Bart confronts Mr Burns. Mr Burns tells him that he did not intend for the property to be held on trust - he just did that for tax avoidance reasons, and he can do what he likes with the funds as it's his money, including giving them to Lisa because she is such a good girl.
Assume you are appearing in the Equity Division of the Supreme Court briefed to appear on behalf of Bart and Maggie in proceedings brought against the trustees and Lisa in relation to the dividend payment to Lisa. Assume that Mr Burns has been joined in the proceedings and was cross-examined about his intention on settling the moneys. You can assume that his evidence was that he never intended the property to be really held on trust but that he put it in the trust deed for tax avoidance reasons.
Outline the nature of any claim you would make on their behalf in relation to the payment to Lisa.
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