A trust may be terminated pursuant to the rule in Saunders v. Vautier, which states that the beneficiaries to a trust may vary or terminate the trust, subject to the following requirements:

1. The beneficiaries must have the full beneficial interest of the trust, usually because there is no gift-over; and
2. The beneficiaries must have capacity.

Stoor v. Stoor Estate, 2014 ONSC 5684.

A recent Ontario Superior Court decision, Jauvin v Estate of Kenneth Lennie, 2024 ONSC 6476, provides a good example of the type of circumstances in which the rule in Saunders v Vautier applies. The facts are as follows:

• The Applicant brought a motion to terminate a trust arrangement between herself and her deceased husband in relation to a property that she lived in, and to obtain a vesting order of the property in her name.
• Applicant’s father (“father”) owned the property that Applicant and Applicant’s husband (“husband”) lived in.
• Father wished for title to the property to transfer to Applicant after his death, but had concerns about putting the property in Applicant’s name. 
• Father added husband to title as a joint tenant, and had Applicant and husband sign a declaration of trust, confirming that husband held the property in trust for Applicant, and that he was bound to convey it to her at Applicant’s direction.
• Father passed away in 2019.
• Husband passed away in 2022, without ever having removed father from title or conveyed the property to Applicant.
• Father and husband remained registered on title to the property. Applicant attempted to convey the property to herself by seeking appointment as estate trustee of husband’s estate, but her attempt failed, as husband’s authority as bare trustee would not vest in Applicant even if she were appointed as estate trustee.
• The court granted Applicant an order terminating the trust arrangement and a vesting order, as they were satisfied that she was the only person with a beneficial interest in the property, and that she had capacity (thus satisfying the Saunders v Vautier test).

Thank you for reading and have a great day.

James