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    Hi all,

    I am dealing with an express trust. However one of the clauses in the instrument has me a little confused. The clause is ...

    (ii) My trustees shall have the power in their absolute discretion to declare that any person or corporation or charity as they think fit shall be added to or included in the class of beneficiaries specified in (i) above

    The clause it refers to is the beneficiaries of the estate, all family. Is this a power? if so what type?

    Thanks!
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    What's your interpretation of it, then I can point you in a different direction if you need it.

    (ppssst - is the wording clear and certain enough?)
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    (Original post by Mimir)
    What's your interpretation of it, then I can point you in a different direction if you need it.

    (ppssst - is the wording clear and certain enough?)
    Thanks for the reply!

    I must admit, I am a little confused with this. My first thoughts are that this is fiduciary power of appointment... but having reread my text book I am a little cross eyed.

    Any help greatly appreciated!
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    (Original post by gednow1)
    Thanks for the reply!

    I must admit, I am a little confused with this. My first thoughts are that this is fiduciary power of appointment... but having reread my text book I am a little cross eyed.

    Any help greatly appreciated!
    You would use this express power here since the beneficiaries do not have an automatic right to income or capital of trust funds under express trusts.

    Off the top of my head, express powers of appointment can be given to trustees to enable them to direct assets for a particular beneficiary/group of beneficiaries. It allows trustees to redirect income or held capital in a trust. It appears this subclause is part of this.

    However, it reads as though the clause is suggesting that Trustees can appoint new beneficiaries to one of the classes specified in an earlier subclause. That's odd. I didn't know something with such uncertainty could be drafted in?

    Unless there's a letter of wishes or some other exhaustive clauses, I'm stumped on this one.
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    (Original post by Mimir)
    You would use this express power here since the beneficiaries do not have an automatic right to income or capital of trust funds under express trusts.

    Off the top of my head, express powers of appointment can be given to trustees to enable them to direct assets for a particular beneficiary/group of beneficiaries. It allows trustees to redirect income or held capital in a trust. It appears this subclause is part of this.

    However, it reads as though the clause is suggesting that Trustees can appoint new beneficiaries to one of the classes specified in an earlier subclause. That's odd. I didn't know something with such uncertainty could be drafted in?

    Unless there's a letter of wishes or some other exhaustive clauses, I'm stumped on this one.
    Thanks for the help, this has had me spinning in circles.
    There is a set of wishes, that essentially the testator does not want certain members of his family being included in the beneficiaries. Would the ability of the Trustees to appoint new beneficiaries mean that members of the family could be included in that class?

    cheers!
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    I've changed the title and labelled this thread so the right people will look at it!

    To your second question, I don't know based on the limited information. If there is a guidance to 'classes' of beneficiaries that are pretty exhaustive, then the trustee is bound.

    Trustees always have to act in the best interest of the beneficiaries, but are also bound by what the Testator wishes. I think.
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    (Original post by gednow1)
    Hi all,

    I am dealing with an express trust. However one of the clauses in the instrument has me a little confused. The clause is ...

    (ii) My trustees shall have the power in their absolute discretion to declare that any person or corporation or charity as they think fit shall be added to or included in the class of beneficiaries specified in (i) above

    The clause it refers to is the beneficiaries of the estate, all family. Is this a power? if so what type?

    Thanks!
    That isn't a power of appointment because the trustees can exercise the power without appointing any property to any person (although, of course, usually exercising the power would be a precursor to appointing property to the new beneficiary).

    Clauses like this are extremely common in discretionary trusts. The starting point for your reading should be Re Manisty's Settlement Trusts, as this was probably the first case where such a clause received detailed scrutiny. I'd guess that most questions you have about it can be answered by reading that (and any discussion of the case in a textbook).

    Edit - to answer the question in your more recent post (admittedly 5 days ago), even a mere power like this is controlled by the doctrine of fraud on a power. You should read up on that doctrine too.
 
 
 
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