The forfeiture rule prevents individuals from profiting from their crimes
The ACT Supreme Court ruled that the forfeiture rule disqualifies a beneficiary convicted of manslaughter from inheriting under a trust, allowing the sole remaining beneficiary to claim the estate.
The deceased, who passed away in 1976, left a will establishing a trust for their spouse's benefit during their lifetime. The trust was to pass equally to their two children upon the spouse's death or remarriage. In 1985, the spouse was unlawfully killed, and one of the children was convicted of manslaughter in connection with the death. This conviction prompted the court to consider whether the forfeiture rule would exclude the individual from benefiting under the terms of the trust.
The remaining child was appointed as the administrator of the estate in 2022, following the death of the sole surviving executor. The administrator sought judicial advice under s. 63 of the Trustee Act to determine whether they could finalize the distribution of the estate.
The forfeiture rule, a principle of public policy, prevents individuals from profiting from their crimes. Although some legal authorities suggest the rule should apply flexibly to cases of manslaughter, the court held that the circumstances of this case warranted a strict application. The convicted individual’s actions were deemed to demonstrate significant culpability, including a lack of remorse, which supported their disqualification from the trust.
The Supreme Court also rejected a model from earlier case law that would have limited forfeiture to the premature enjoyment of the trust benefits. Instead, the court concluded that the individual’s actions precluded them from receiving any benefit under the trust.
With one child disqualified, the court recognised the other as the trust's sole lawful beneficiary. The court invoked the principle established in case law, which allows adult beneficiaries with an absolute and indefeasible interest in trust property to terminate the trust. This ruling permitted the beneficiary to distribute the remaining trust assets to themselves.
The court authorised the final distribution of the estate, providing procedural safeguards to notify the disqualified individual of the decision. The individual retained the right to challenge the distribution within a prescribed period, although the court’s reasoning suggested such a challenge is unlikely to succeed.
