Trustee Powers in a Will
- Written by: Jason
- Category: Will Writing
- Published: 25th February 2014
The Executors that you appoint in your Will are legally responsible for the administrative work of rounding up the assets of your estate before distributing them to your beneficiaries.
In the majority of Wills, these Executors also act as Trustees for funds that have to be managed for any length of time.
For example, funds due to minor children aged under the age of 18 years.
In a professionally drafted will the trustees will be granted Trustee Powers that are designed to help them organise the management of the funds as flexible as possible and for the maximum benefit of the beneficiaries of the Will.
Explaining Trustee Powers
How Trustee Powers are outlined in a Will is often down to individual requirements and the advice of your Will writing professional. They are normally included in one of two following ways:
The Standard Provisions of the Society of Trust and Estate Practitioners
IN MY WILL where the context so admits any reference to Trustee Powers shall mean the Standard Provisions and all of the Special Provisions of the Society of Trust and Estate Practitioners (2nd edition ) shall apply
Explained
This clause is an alternative way to the more traditional listing of separate trustee powers in a Will and is accepted by probate registrars.
The intention of the standard STEP provisions is to simplify Will writing with a single reference for trustee powers
Standard List of Trustees Powers commonly written into a Will
I DECLARE that any Trustees hereof shall have power to employ a Solicitor an Accountant or any other person engaged in any profession business or trade in connection with the trusts hereof including acts which a Trustee not being in any profession business or trade could have done personally and that persons thus employed shall be entitled to be paid all of the usual professional business and trade charges for business transacted time expended and acts done by him or an employee or partner and that such payment shall be made from my Estate as part of my testamentary expenses
Explained
Using family and friends as non-professional executors can help to save fees.
However, If the Trustees find there are aspects of the estate administration that they cannot deal with competently then this clause states they can employ a professional person to help with just this part.
WITHOUT INTENDING to derogate from the statutory powers of maintenance and advancement conferred by sections 31 and 32 of the Trustee Act 1925 I declare that my Trustees may at any time or times in their absolute discretion apply any part or parts of the capital (up to the whole extent) of a share or interest in my residuary estate of a beneficiary hereunder for the maintenance education advancement benefit or advantage in any such way as my Trustees shall think fit of such beneficiary
Explained
If there is a delay in receiving an inheritance the Testator would have intended that any beneficiary who was a minor should benefit in terms of education and maintenance before reaching the age of majority.
This subclause allows for funds to be advanced for these purposes.
WHENEVER MY TRUSTEES shall determine herein to apply any income or capital for the maintenance support or benefit of any minor they may themselves apply that income or capital or pay the same to the parent or guardian of such minor without seeing the application thereof and without regard to the means of such parent or guardian or to the amount of any other income of such minor
Explained
When the Trustees use income or capital from the estate to support a minor beneficiary they are not obliged to follow up the actual use of the money.
The decision to allocate money in this way should not be ‘means tested’, it should be independent of any funds available to either the minor beneficiary or their parent or guardian.
I DECLARE that any money liable to be or required to be invested under this my Will may be invested in the purchase of or at interest upon the security of such stocks funds shares securities or other investments of whatsoever nature and wheresoever situate and whether involving liability or not upon such personal credit with or without security as my Trustees shall in their absolute discretion think fit to the intent that my Trustees shall have the same full and unrestricted powers of investing and transposing investments in all respects as if they were absolutely entitled thereto beneficially
Explained
The ability to make investments is particularly important if the estate has to be looked after for any length of time, for example when the main beneficiary is a child.
If monies from the estate were simply left on deposit, it could be argued that inflation, taking its toll, would reduce the value of the inheritance.
The answer would be to allow the Trustees to make prudent asset-backed investments such as stocks and shares to maintain the real value of the funds.
In doing this there is likely to be an element of uncertainty surrounding the potential returns and growth from such investments, this sub-clause absolves the Trustees from liability for this type of investment decision made in good faith.
I DECLARE that my Trustees may exercise the power of appropriation conferred by section 41 of the Administration of Estates Act 1925 without obtaining any of the consents required by that Section and even though he/she or they may be beneficially interested in the property appropriated
Explained
Sometimes a beneficiary may wish to exchange a legacy of money for a personal item, for example, an antique or piece of artwork. This clause allows the Trustees to arrange such substitutions.
I DECLARE that all income accruing wholly or partly before the date but received after the date when a beneficiary under my Will shall attain a vested interest in income shall not be apportioned but shall be applied as income received wholly after such attainment of a vested interest
Explained
All the income due to a beneficiary shall be treated as having come after the beneficiary gained access to their inheritance.
The advantage of using this clause could be that less tax is paid from the estate.
I DECLARE that my Trustees shall have power to insure against loss or damage by fire or from any other risk any property for the time being comprised in my estate to any amount and even though a person may be absolutely entitled to the property and to pay the insurance premium out of the income or capital of my estate or the property itself and any money received by my Trustees under such a policy shall be treated as if it was the proceeds of sale of the property insured
Explained
This covers the natural care that would be exercised as owners of a property, it must be included to allow trustees to buy renewal insurance when needed
NOTWITHSTANDING the provisions of Section 11 of the Trusts of Land and Appointment of Trustees Act 1996 my Trustees shall not be bound to consult with any beneficiary or to give effect to the wishes of any beneficiary in exercising any of the powers or obligations vested in them by this my Will or otherwise and Sections 19 and 20 of the same Act do not apply to the trusts created by this my Will
Explained
Unless this clause is included Beneficiaries of property could overrule the actions of the chosen executors.
EVERY PERSON who would otherwise benefit under this my Will but who fails to survive me for thirty clear days shall be treated for the purposes hereof and for the purposes of the devolution of my estate as having predeceased me and my estate and the intermediate income thereof shall devolve accordingly to the intent that no person shall be entitled to any intermediate income from my estate or any part of it if he or she dies within that period or acquire therein or in any part thereof a vested interest (or a vested interest subject to defeasance) before the end of it Beneficiaries of property could overrule the actions of the chosen executors unless this clause is included
Explained
Normally all distributions within a Will are made subject to the beneficiary surviving the Testator by 30 clear days.
This avoids a situation whereby an Executor would have to go through all the processes of administering a Will only to have to go through the process straight away on second death within 30 days.
This is very important if the Estate is passing between spouses who may both be fatally injured in the same accident.