Rawstron & Anor (Executrices of the Estate of Lucian Freud) v Freud

A residuary gift in a will is construed from the language of the will read as a whole and in its factual context, applying the ordinary principles used for contractual interpretation. The court must not imply an undefined trust merely because the named residuary beneficiaries are also executors or trustees, or because one is the testator’s solicitor. Administrative powers and charging provisions may be ancillary and need not convert an apparently personal gift into a fiduciary one. A material change from an earlier will that expressly created a half-secret trust may strongly support the conclusion that the later will was intended to make an outright gift. Extrinsic evidence of the testator’s intention is inadmissible where the statutory conditions for admitting it are not engaged.

The executrices of Lucian Freud’s estate sought a declaration under CPR Part 8 that clause 6 of his 2006 Will gave them the residuary estate absolutely. The defendant, another child of the deceased, contended that they took the residue as trustees under an undefined half-secret trust, potentially leaving the residue undisposed of if the trust failed. The dispute concerned the effect of clause 6, read with the provisions concerning chattels, copyrights, administrative powers and trustee remuneration, and compared with the materially different residuary clause in the 2004 Will. The central issue was whether the words used created an outright beneficial gift or a fiduciary gift.

1. Claim succeeded. The court declared that the claimants’ interpretation of clause 6 was preferable. The parties were directed to agree the form of order.
2. A will is construed by identifying the meaning of its words in the light of the document’s overall purpose, other provisions, the material factual matrix and common sense, while excluding subjective evidence of intention. The court must approach the testator’s intention through the language used. Section 21 of the Administration of Justice Act 1982 was not engaged, and no extrinsic evidence was admissible as an aid to construction.
3. Although clause 6 named the executrices, referred to them as the persons previously appointed as executors and trustees, and gave the residue to them jointly, it was expressed as a simple gift of residue and contained no mention of a trust. The contrast with clauses 3 and 4, which referred to them as “Trustees” and gave property to them in a fiduciary capacity, supported an outright gift.
4. The fact that some property might be received in a fiduciary capacity, or that clauses 3.3, 7 and 8 contained trust-related or charging provisions, did not require the entire residuary gift to be held on trust. Those provisions could operate during administration or otherwise be treated as ancillary. Their force was further reduced because clause 7 had been copied substantially from the 2004 Will.
5. The solicitor-beneficiary point required vigilance in the public interest, but did not justify implying an undefined trust. Secret trusts are recognised, and the evidence that the residue was subject to a fully secret trust provided a reasonable explanation for the gift to the solicitor without altering the construction of the Will.
6. The decisive contextual feature was the replacement of the 2004 Will’s plainly half-secret residuary trust with the materially different wording of clause 6. In light of professional advice from the same solicitors, the only reasonable conclusion was that the testator did not intend to create a half-secret trust by the 2006 Will. These case-specific circumstances distinguished the authorities relied upon by the defendant.