Adopted Children in £3 Million Trust Victory

Two adopted children stand to benefit from a £3 million trust fund despite the fact that the trust was set up when adoption did not automatically confer inheritance rights. The High Court so ruled, applying European Convention articles against discrimination retrospectively. 

The case concerned a trust fund that was originally set up in 1948 by Denys Erskine in favour of his daughter Margaret. In the event that Margaret died childless, the trust was to provide for her sister. Margaret died in 2010 without children and with no living parents or siblings. However, her sister had left two children who were adopted. The children and a number of their cousins claimed benefit of the fund.

At the time the fund was set up, the legal meaning of the phrase ‘statutory next of kin’, which was a requirement in the trust deed for entitlement under it, would have excluded adopted children. However, it was claimed that the sister’s children should be able to rely on provisions of the European Convention on Human Rights which have the effect of preventing discrimination against adopted children. The question was whether these rights could apply retrospectively.

Lawyers for the adopted children argued that the Court ought to interpret the settlement in line with Article 8 of the Convention (right to respect for family life) and Article 14 (prohibition of discrimination) so as not to discriminate against adopted children. It was submitted for the trustees that the phrase ‘statutory next of kin’ under the Administration of Estates Act 1925 did not include adopted children.

Whilst it agreed with the trustees’ submission as regards the historic meaning of the phrase ‘statutory next of kin’, the Court found that there was no explicit exclusion of adopted children in the settlement. Taking this and a number of other ‘special features’ into account, the Court held that there was no reason why the European Convention should not have retrospective effect. The trust deed should therefore be construed in such a way as to eliminate discrimination against adopted children and the settlement therefore vested in the sister’s children.