Amendment of trust to redirect remainder interest

I am dealing with a matter concerning a trust which appears to have been a home protection plan, set up by a husband and wife, with the documents having been drafted by another firm in 2011.

The original declaration of trust (DoT) sets out that the husband and wife each transferred 37.5% of their respective interests in the property (ie 75% of the whole of the property) to the trustees to sell, with power to postpone sale as long as they think fit. The DoT goes on to provide that the Trustees will permit the husband and wife to continue to live in the property rent free etc.

The default provisions in the DoT are “Subject to the above, the Trustees will hold the Trust Share (ie the 75%), its net income until sale, its net proceeds of sale and the investments representing the same (the “Property Fund”) on trust to transfer the same to the Trustees of the X Family Trust made on [date of original trust] 2011 to hold the same subject to the powers provisions and terms thereof and generally as an accretion to its Trust Fund (as therein defined).” - The beneficiaries of that trust include remoter issue born during the trust period.

In 2013 the wife died.

In 2019, the Trustees and the husband entered into a deed of amendment to change the terms of the original DoT so that instead of the remainder passing to the X Family Trust, it would pass absolutely to a number of named beneficiaries in various percentage shares.

My question is, what are your views on the validity and effect of this 2019 deed of amendment? My concern is that as the beneficiaries of the Family Trust which was to receive the remainder interest includes remoter issue, they could not have obtained consent from all beneficiaries? Am I missing something? I of course could be and so would be very grateful for any thoughts!

Could the 2019 deed have been executed consequent upon the exercise by the trustees of the X family trust of a power of appointment in favour of some of the beneficiaries of that trust?

Otherwise, unless the 2011 declaration of trust includes a power to amend the trusts, I am not sure what authority, if any, there would be for the settlor and/or trustees to amend the dispositive terms of the property trust.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

Thanks Paul.

There is no express power to amend the trusts in the document, and I have not been provided with any other documents (or copies of documents) evidencing an exercise of the power of appointment under the X Family Trust.

I think my next step is going back to the firm that prepared the deed of amendment to see if there are any other documents which they haven’t provided to me.

Really appreciate your input - thank you for responding!