What ways are powers exercisable?
- inter vivos (deed)
2. will
What are the 3 types of powers?
- Special power- the person with the power can choose between a specified group of people.
- General power- it can be exerciable amongst anyone in the world. The donee could even include themselves in the category
- Intermediate power- can be exercised by anyone in the world except from a specific person or persons E.g. You can choose anyone to receive capital funds except from Anna.
What are the differences between Trusts and powers? 3
Hillsdown Holdings v Pensions Ombudsman Re Mills.. Re Weekes
- Powers are discretionary, trusts are mandatory. Powers use the word ‘may’.
- Trustees are under a duty. A donee has to exercise their powers within the limits of proper use of their power of appointment.
Hillsdown Holdings v Pensions Ombudsman- the company was a donee of a power and tried to change the rules so it could get some of the surplus.
HELD: this was deemed improper use - Intentions of the settlor, the court has to construe the words that they used to see if its an intended power or a trust.
Re Mills- If a gift over in default of appointment is there then it must be a power. This is proof they wanted to create a power.
What happens in failure to exercise? Re Weekes.
W died before her husband and gave her husband a life interest only in her appointment, Mr W had power to dispose of the capital of the fund amongst the children. She didn’t put a gift over in default. Mr W never made a will and never exercised the power before he died. Court had to decide whether it could put it in an implied gift of appointment.
HELD: Normal resulting trust principles applied, went back to her residual estate, which was what the son had.
Will administrative unworkability invalidate a power?
No, powers involve a wide range of beneficiaries.
Will capriciousness be a factor?
Yes the court won’t uphold stupid powers.
What is a fiduciary power?
A power given to someone in a fiduciary position. E.g. a trustee. Because of their position they have to exercise that power from time to time, they can’t just sit back and forget.
Trust power.. power in the nature of the trust.. power of a fiduciary character.. power imperative.. all fiduciary.
What is the test for certainty of objects for fiduciary powers?
The is or is not test same as discretionary trusts.
