Re Hay's Settlement Trusts
A wide power of appointment in favour of anyone in the world, except certain people, is valid, but trustees must consider the range of objects and the appropriateness of appointments.
Facts
A settlement gave the trustees a power to appoint the trust property to such persons or purposes as they thought fit, except the settlor, her husband and the trustees themselves. The trustees later made an appointment under the power, and the question arose whether the power was valid, given that its objects were the whole world with a few exceptions.
Legal principle
Megarry V-C held that the power was valid. He said that a power of appointment held by trustees is not invalid merely because its objects are very wide, since its width does not prevent the trustees from performing their duties in relation to it. Trustees must consider periodically whether to exercise the power, must consider the range of objects, and must consider the appropriateness of individual appointments. But a discretionary trust in such wide terms might be void as administratively unworkable. The appointment itself was invalid, because it purported to give other trustees too wide a discretion.
Related cases on certainty of objects and discretionary trusts
- Re Baden's Deed Trusts (No 2) [1973] Ch 9
- Re Barlow's Will Trusts [1979] 1 WLR 278
- Breakspear v Ackland [2008] EWHC 220 (Ch), [2009] Ch 32
- Re Gulbenkian's Settlements [1970] AC 508
- IRC v Broadway Cottages Trust [1955] Ch 20
- Re Londonderry's Settlement [1965] Ch 918
- Re Manisty's Settlement [1974] Ch 17
- McPhail v Doulton [1971] AC 424
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