The law applicable to powers tends to be based on seriously ancient cases and the usefulness of “Thomas on Powers” is that it is a modern book still in print, now in its second edition from 2012 (third due in 2042 per Wildys!), and it cites all these abstruse vintage cases, accessible to most of us mortals only in a specialist library.
The rules vary according to whether it is a bare power (whether or not fiduciary) or a power conferred on the donee(s) by virtue of the office held by them and so in due course any successors.
In essence, like the ribald Limerick, it is a question of who can do what, with what, when, and to whom. This is fundamentally a matter of construction, of the donor’s intention and of the instrument of creation, based on cogent admissible evidence.
The instant problem is one of lawful devolution of the power. This is not a typical power to add clause: because usually it is indeed expressly conferred on the appointed trustees as office holders, with or without the required consent of a settlor, or an adult beneficiary, or a Protector, singly or jointly; if jointly a similar issue will attach instead to the consent.
Here the power is vested in the “Settlors”. This is likely to be a defined term and it seems the trustees are different persons. Trustees do not face any devolution problem: s.18 TA solves it almost always. The only ambiguity here might be if the settlors were also the trustees. For example, a power vested in “A and B, my trustees” is open to the interpretation, but only in the precise context, as a power of the trustees and not just of the named persons. If the Settlors and trustees are mutually exclusive personnel how can it be a trustee power?
A further construction issue is whether the donees’ power is joint or joint and several, if it is not a trustee power. A small clue here is that it is exercisable by deed, by donees who are alive, but that does not settle the matter of whether the survivor can act alone. The best argument here seems to be joint and several by implication.
Not to make that abundantly clear is a serious drafting error, compounded by not making it clear either as to whether it is a bare or trustee power within s.18. That has been state of the art for at least 46 years: in Re Lees’ Trusts [1980] WN 220 a joint power was explicitly made exercisable by the survivor and I fear that would have been best practice drafting for some very long time before.
I have not seen the whole document but the separate fund designation may be helpful in context (what pompous jurists, like yours truly, call a tabula in naufragio). It makes quite a bit of common sense that the power might have been intended to devolve on the survivor, to preserve the important flexibility that it offers (as the proposed action demonstrates) even at a future time when a dead donee could no longer exercise it. On the other hand a right of occupation could not in practical terms be carved out of the survivor’s designated fund alone. Is there evidence that the deceased would or would not have approved of the proposal? Do the beneficiaries who matter?
So the 3 specific questions you pose are spot on. The only clear answer is that there are no presumptions. A court will take into account all relevant facts and circumstances, and the evidence.
The issue is plainly very important: the power is not in itself a dispositive power but is only ever likely to be exercised in order to facilitate the trustees’ using one of theirs, perhaps radically and not just in the limited way proposed. What happened to the deceased’s free estate? If it was all left to the survivor this together with other background detail, such as mirror Wills, might evince trust on behalf of the first to die in the survivor to do the right thing with their combined assets including those in the trust wrapper, which might be the most valuable.
No doubt the trustees could not grant this right of occupation without it being a fraud on the power they purport to exercise. Such an act would be void not voidable. This means that it cannot be authorised by all eligible beneficiaries, even if all are ascertainable and adults with capacity (sounds possible unless there are unborns).
However the trustees could simply permit the partner to reside, backed up as suggested by a non-binding letter of wishes. If they chose to do so, taking care with advice to limit lawful security of tenure, it sounds that, as the trustees are probably also the principal beneficiaries, no one will complain in practice. HMRC can challenge a void disposition but arguably a simple omission to evict the partner who has no security of tenure even if an omission under s3(3) IHTA is unlikely to be much of a tax exposure under s.65(1)(b). If it is not possible or opportune to sell the house immediately the trustees may well be able to justify this indulgence as avoiding an empty property and of course they could delay probate, with unofficial connivance. Paying the tax on time on pain of interest will count against such voluntary tardiness.
The joint and several issue is apt for seeking the directions of the Court. See the magisterial decision of HHJ Paul Matthew’s in Cator v Thynn [2026] EWHC 209 (Ch). Costs may well be a deterrent, which is why a failure by a lawyer to draft out potential ambiguities can be so expensive, at least where they were readily foreseeable. The difference between joint and joint and several ownership and liability is on the level of “Janet and John go to Jurisprudence”, which the drafter of this “standard” trust did not read or so it seems.
Mr Kessler’s seriously scrumptious precedents safely vest this power in the trustees as such. QED!
This dissertation is not to be taken as my being in favour of the creation of a 1 year right of residence, as it is akin to the construction of a time delay bomb (an explosive designed to detonate at a predetermined time in order to cause maximum disruption and casualties or to allow the perpetrator to escape —if their insurers pay out).
Jack Harper