Contents

Chapter 10
Revocation and variation

Indicative draft provisions

Part 4
Administration of trusts

Subpart 1—Revocation and variation of trusts
51 Revocation by unanimous consent of beneficiaries
(1) The trustees of a trust must terminate the trust and distribute the trust property on being required to do so by the beneficiaries if the conditions set out in subsection (2) are satisfied.
(2) The conditions for the termination of the trust under subsection (1) are as follows:
(a) the trustees have received a written notice requiring the trustees to terminate the trust; and
(b) the notice is signed by each beneficiary or by the duly authorised agent of that beneficiary; and
(c) each beneficiary is, at the date of receipt of the notice, 18 years of age or older and otherwise a person of full legal capacity.
(3) The conditions in subsection (2) are treated as satisfied in respect of a person on whose behalf the court has made an order of approval under section 54 or an order of waiver of consent under section 55.
52 Other actions with unanimous consent of beneficiaries
(1) The beneficiaries of a trust acting unanimously may do any of the following things, if the conditions set out in subsection (2) are satisfied:
(a) confer new powers upon the trustees:
(b) vary the terms of the trust:
(c) deviate from the terms of the trust:
(d) consent to the resettlement of the trust.
(2) The conditions for an action by the beneficiaries under subsection (1) are:
(a) the trustees have received a written notice of the proposed new powers, variation, deviation, or resettlement, as the case may be; and
(b) the notice is signed by each beneficiary or by the duly authorised agent of that beneficiary; and
(c) each beneficiary is 18 years of age or older and otherwise a person of full legal capacity; and
(d) the trustees have agreed to the proposal.
(3) The conditions in subsection (2) are treated as satisfied in respect of a person on whose behalf the court has made an order of approval under section 54 or an order of waiver of consent under section 55.
53 Beneficiary’s right to share of trust property
A beneficiary of a fixed share of the trust property may require the trustees to transfer that share to the beneficiary (and the trustees must do so) if—
(a) the beneficiary is absolutely entitled to that share (for example, any condition relating to the vesting of that share set by the terms of the trust has been met); and
(b) the property is in a form, or can be changed into a form, that can be transferred to the beneficiary; and
(c) the transfer is not detrimental to the interests of the other beneficiaries; and
(d) the beneficiary is 18 years of age or older and otherwise a person of full legal capacity.
54 Power of court to approve revocation, variation, or resettlement of trust
(1) The court may, on behalf of any of the persons set out in subsection (2) who has an interest in property held under a trust, approve the revocation, variation, or resettlement of the trust.
(2) The persons referred to in subsection (1) are as follows:
(a) a person under the age of 18 years:
(b) a person who lacks full legal capacity:
(c) a person who may acquire an interest at a future date or on the happening of a future event or on becoming a member of a certain class of persons:
(d) a future person.
(3) On an application for an order of approval under subsection (1), the court—
(a) must take into account the following factors:
(i) the nature of any person’s interest in the trust property and the effect of the proposed order on that interest; and
(ii) the benefit or detriment that may result from the proposed order to any person having an interest in the trust property; and
(iii) the benefit or detriment that may result to any person having an interest in the trust property if the court refuses to make the proposed order; and
(iv) the intentions of the settlor of the trust in settling the trust property, if it is practicable to ascertain those intentions; and
(b) must not make an order of approval if its effect would be to reduce or remove any vested interest in the trust property or other property right held by a beneficiary.
(4) An order of approval under subsection (1) binds the person on whose behalf it is made and takes effect without any further step.
(5) In this section, interest includes—
(a) a direct or an indirect interest:
(b) a contingent interest.
55 Power of court to waive requirement of consent to revocation, variation, or resettlement of trust
(1) The court may waive the requirement that the consent of a person be obtained for the revocation, variation, or resettlement of a trust.
(2) On an application for an order of waiver of consent under subsection (1), the court—
(a) must take into account the following factors:
(i) the nature of any person’s interest in the trust property and the effect of the proposed order on that interest; and
(ii) the benefit or detriment that may result from the proposed order to any person having an interest in the trust property; and
(iii) the benefit or detriment that may result to any person having an interest in the trust property if the court refuses to make the proposed order; and
(iv) the intentions of the settlor of the trust in settling the trust property, if it is practicable to ascertain those intentions; and
(b) must not make an order of waiver of consent if its effect would be to reduce or remove any vested interest in the trust property or other property right held by a beneficiary.
(3) An order of waiver of consent under subsection (1) binds the person on whose behalf it is made and takes effect without any further step.
(4) In this section, interest includes—
(a) a direct or an indirect interest:
(b) a contingent interest.

56 Power of court to vary or extend trustees’ powers in relation to property
(1) The court may vary or extend the powers of the trustees of a trust in relation to property transactions if—
(a) the court considers that the variation or extension is necessary for the proper management of the trust property; and
(b) the variation or extension does not alter or otherwise affect a beneficiary’s interest under the trust.
(2) An application for an order under subsection (1) may be made by—
(a) the trustees or any 1 of them:
(b) any person beneficially interested under the trust.
(3) In this section, property transaction, in relation to trust property, means the acquisition of, disposition of, or other dealing with trust property and includes sale, lease, mortgage, surrender, release, purchase, investment, retention, and expenditure.

Commentary

The definition of beneficiary in clause 1 (Interpretation) of the Bill will apply. A beneficiary means a person who receives, or who will or may receive, a benefit under the terms of the trust; and includes a discretionary beneficiary; and may include the settlor or trustee.