The substantial increase in the investment powers given to trustees by the Trustee Act 2000 should mean that it will be rare that they will consider their powers to be too narrow. However, there may be some instances in which they seek wider investment powers, for instance permitting the purchase of property overseas, or clarifying whether they are permitted to assets which produce no income. There are a number of ways in which this may be possible.
Power of variation in trust deed
Some trust deeds contain provisions under which alterations or amendments to the deed can be made. For instance, the Universities’ Superannuation Scheme Rules provide that the rules can be altered by deed, with certain restrictions concerning maintaining the purpose of the scheme to provide pensions and other benefits for eligible employees, and subject to certain consents.
Consent of beneficiaries
Where all the beneficiaries of a trust are ascertainable and, being competent to do so, give their consent, then new powers of investment proposed by the trustees may be adopted.
Variation of Trusts Act 1958
Where it is not possible to obtain consent from all the beneficiaries of a trust, or some of the beneficiaries of the trust are not competent to give consent, and in certain other cases, the Variation of Trusts Act 1958 will apply. This enables the court to approve a variation of trust, including a variation of investment powers, on behalf of the unascertainable or incompetent beneficiaries. This Act does not permit the court to consent to a variation on behalf of ascertainable and competent beneficiaries who have not been consulted (even where to do so would be inconvenient) or to override a refusal of consent by such a beneficiary.
Trusts Act 1925, s 57
This section authorizes the court to approve a transaction, either exceptionally or generally, and has been held to be wide enough in scope to authorize extended investment powers.
For more information on:
- Principles on which court grants approval