Under the Rule in Saunders v Vautier, beneficiaries can dissolve a trust if they are all of adult age, of sound mind, and in unanimous agreement. In 2026, disputes often arise when “contingent” beneficiaries (like unborn grandchildren) make unanimous consent impossible, or when trustees refuse to step down despite beneficiary pressure.
Read our complete guide on contesting a will for lack of capacity.
The “Unanimous Consent” Rule (Saunders v Vautier)
The most direct way to dissolve a trust in 2026 remains the Rule in Saunders v Vautier. This principle allows the beneficiaries to overrule the wishes of the person who created the trust (the Settlor) and demand the assets immediately.
However, three strict criteria must be met:
- Absolute Entitlement: Every person who has a potential interest in the trust must be identified.
- Capacity: Every beneficiary must be at least 18 years old and have full mental capacity.
- Unanimity: Every single beneficiary must agree to the dissolution. If one person says “no,” the trust remains.
The “Contingency” Trap
The biggest obstacle in 2026 is the Discretionary Trust or trusts with “unborn” beneficiaries. If a trust says “to my children, and then to their children,” the current beneficiaries cannot dissolve it because the “unborn grandchildren” cannot give their consent.
The 2026 Solution: In these cases, we apply to the court under the Variation of Trusts Act 1958. The court can essentially “step in” and provide consent on behalf of minors or unborn children if we can prove the dissolution is in their best financial interest.
The 4 Ways to Dissolve a Trust in a Dispute
1. Invoke Saunders v Vautier
The Fast Track
If all beneficiaries are adults and agree, we draft a Deed of Termination. The trustees are legally required to hand over the assets, even if they disagree with the decision.
2. Variation of Trusts Act Application
For Blended Families
If there are minors involved, we ask the High Court to approve the dissolution. In 2026, courts are increasingly approving this if the trust’s tax burden outweighs its benefits.
3. Breach of Trust Removal
The Hostile Route
If a trustee is mismanaging funds or refusing to communicate, we sue to remove them. Once a “friendly” trustee is in place, the path to dissolution becomes much easier.
4. The ‘Sunsetting’ Clause
Check the Deed
Many modern trusts have an 80 or 125-year limit. We audit the original Trust Deed to see if the trust has technically already expired, allowing for immediate distribution.
Trustee Opposition: Can They Stop You?
Trustees often resist dissolution because they believe they are “honoring the Settlor’s wishes.” In 2026, the law is clear: Trustees do not have the power to block a valid Saunders v Vautier request.
If a trustee refuses to transfer the assets after a unanimous request, they are in Breach of Trust. We can apply for a mandatory injunction to force the transfer, and the trustee will usually be ordered to pay the legal costs personally for their “unreasonable” obstruction.
Tax Implications of Dissolving a Trust
Dissolving a trust is not a “tax-free” event. In 2026, the two primary hurdles are:
- Capital Gains Tax (CGT): When the trust ends, the assets are “deemed” to have been sold at market value. This can trigger a significant tax bill.
- Inheritance Tax (IHT) Exit Charges: Depending on the type of trust, there may be a “pro-rata” charge for the time the assets were held.
Case Study: Ltd v Wen-Young Wong
The 2023 High Court ruling in Grand View Private Trust Co Ltd v Wen-Young Wong serves as a landmark warning for trustees attempting to block dissolution or significantly alter trust structures. In this case, the court scrutinized the “proper purpose” of trustee powers when they attempted to move billions of dollars in assets from a family trust to a purpose trust, effectively cutting out the original beneficiaries.
The court ruled that even if a trust deed grants “absolute discretion” to trustees, that power is not truly absolute—it must be used to further the original purpose of the trust.
For beneficiaries in 2026, this case is a powerful precedent: if your trustees are resisting dissolution or redirecting funds in a way that contradicts the settlor’s intent to provide for the family, the “Proper Purpose Rule” allows you to challenge their decisions as a “fraud on a power,” potentially forcing the trust to be wound up and distributed.
2026 Trust Termination Checklist
| Requirement | Why it Matters |
| Absolute Entitlement | You must be the “final” owner; “Life Interest” beneficiaries can’t dissolve without the “Remaindermen.” |
| Sui Juris Status | Every beneficiary must be 18+ and have mental capacity. |
| Unanimity | A single “No” from a tiny 1% stakeholder can block a Saunders v Vautier claim. |
| Trustee Indemnity | Trustees will often require a “Release and Indemnity” deed to protect them from future tax claims before they release the funds. |
Let’s Do This Together
Contesting a will could become an overwhelming experience if not accompanied by expert guidance and support. Our mission is to provide you with all the needed information, support, and authority to get through this journey, with only one goal in mind: Fairness.
To our team, this process is not about winning; it’s about claiming what was yours from the beginning.
Get your free, no-obligation case assessment. Call 08002980029 or visit contestawilltoday.com
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FAQs
1. Can a single beneficiary dissolve a trust?
No. Unless you are the only beneficiary named, you cannot act alone. You must get every other person named in the trust to sign the Deed of Termination.
2. What if a beneficiary lacks capacity?
If a beneficiary has dementia or a learning disability, their Deputy or Attorney (LPA) can sometimes give consent on their behalf, but this usually requires approval from the Court of Protection first.
3. How long does it take to dissolve a trust?
If everyone agrees, it can be done in 4–8 weeks via a Deed of Termination. If you have to go to court to represent minors or remove a trustee, it can take 6–12 months.
Meet Our Founder
With over 30 years of experience across civil litigation and dispute resolution, DS Bal brings a deep, broad understanding of the legal process to every case. His background spans complex disputes involving individuals, families, and estates. LinkedIn
