Passing the baton -trusting into the future

Accordingly, amending the powers of a Guardian will not give rise to a “resettlement” in accordance with the case law on when a trust is “settled” or “resettled”.

(Note however that it is technically possible for a limitation imposed by the introduction or amendment of a Guardian power to directly affect the vested interest of a beneficiary in some circumstances.[17]  For example, under most discretionary trust deeds the “takers in default of appointment” have a vested interest in the trust fund assets (albeit of little value, because that interest is capable of divestment).
An amendment to the Guardian power which cut across that vested interest and purported to remove the entitlement of one or more default beneficiaries may arguably result in a “resettlement” of that trust fund
[18]. The High Court’s approach in Chief Commissioner of Stamp Duties (NSW) v Buckle [19] however would suggest that the “resettlement” in question may be limited to the default interest affected, rather than the trust fund as a whole. The issue may however be a “live” one where a Guardian power cuts across a “default” income distribution provision already in the deed to avoid the operation of section 99A.)

In the Commissioner’s August 2001 restatement of his Statement of Principles dealing with the creation of new trusts, he identifies a number of changes to beneficial interests under a power of amendment which he considers may “raise the question of whether a new trust has been created”. Relevantly included amongst those changes for present purposes are:

  • ·         “any change in beneficial interests in property;
  • ·         a new class of beneficial interest (whether introduced or altered);
  • ·         a possible redefinition of the beneficiary class;
  • ·         changes in the terms of the trust or the rights or obligations of the trustee”

It is apparent from the analysis above that the introduction of a Guardian power cannot, of itself, effect any change in beneficial interests in the trust fund property, nor can it introduce or create a “new class of beneficial interest” or redefine any existing class of beneficiary.

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