Can a charitable trust be revoked if the settlor was mentally unwell at the time of establishing it?

Question Details: Can a charitable trust be revoked if the settlor was mentally unwell at the time of establishing it? The trust deed says the trust is irrevocable but surely the trust can be revoked if the settlor was lacking in mental acuity at the time of establishing it?

Filed under Charitable Organisations | 1902 View(s)

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Answers by Lawyers

Community Law Wellington & Hutt Valley

It would depend whether the settlor had the capacity to understand what they were doing in establishing the trust. They need to have had capacity to understand the documents they were signing and not have been coerced into signing them.

The lawyer who prepared the trust documents and witnessed their signing should have an opinion as to whether the settlor understood what was being done.

There is a large range of "mentally unwell" and a diagnosis of this will not automatically mean the settlor didn't have capacity sign legal documents.

Although there is a statement about the trust being irrevocable, there can be situations where a trust can be challenged. We believe you will need legal advice about the particular situation you are asking about. You can use this Law Society search tool to find a local lawyer who advises about trust law: www.propertylawyers.org.nz

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