By: Jeff Kenny
Published: 29/04/2010
Trustee Powers - Background

When a settlor gives a trustee an asset to hold on trust for a beneficiary, the starting point is that the trustee must hold that asset and keep it for the beneficiary.

A trust in those bald terms is fairly unusual in the family trust situation but the point is that if a trustee is to legally deal with the asset or change the terms on which it is held the trustee must somehow be authorised to do so.

That authority can come from:
  • Express powers given by the settlor under the trust instrument.
  • Implied powers given by the settlor under the trust instrument. For example if a settlor expressly confers a power to carry on business this usually brings with it an implied power to borrow for certain business purposes.
  • Implied powers given by the Trustee Act. These can be excluded or amended by the settlor.
  • The beneficiary (if the trustee agrees).
  • The Court (subject to certain protections under case law and the Trustee Act).
Today we will look at powers of appointment and powers of advancement.

There are some similarities between these two powers. However they are, in fact, quite different. Historically they arose from different areas of the law.

Powers of appointment come from the law of powers - just like powers of attorney or powers of sale.

Powers of advancement, on the other hand, come from the law of trusts.

Since the Second World War powers of appointment have often been included in trust deeds so you will more often than not find a mixture of the two in trust deeds.

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