STATUTORY POWERS COMMONLY MODIFIED IN A WILL.

Power to invest

·      Used to be governed by the Trustee Investments Act 1961 which was very restrictive.

·      Many wills included an administrative clause which extended the statutory power to invest and which gave the trustees full power to invest at their discretion in any investment as if they were sole absolute owners.

·      S3 Trustee act 2000 contains a general power of investment. A Trustee may make any kind of investment that he could make if he were absolutely entitled to the assets of the trust.

·      S4 TA states a trustee(or personal representative) must have regard to the standard investment criteria ie suitability and diversification of investments. The trustee must also from time to time review the investments.

·      S5 TA requires the trustee to consider taking advice as to how the power should be exercised.

·      S3 TA does not apply to investments in land.

·      S8 TA gives trustees and personal representatives power to acquire land in the UK as an investment, for occupation by a beneficiary or for any other reason.

·      Although the powers of investment are now much wider than pre 1996, it may still be appropriate to amend the statutory power e.g. to allow for purchase of foreign investments or to purchase property abroad.

Power to advance capital

·      Currently under s.32 Trustee Act 1925 both personal representatives and trustees have an absolute discretion to apply capital for the advancement or benefit of any person who has either a vested or contingent interest in the capital.

·      The power to make advancements under s.32 has been amended by the Inheritance and Trustees’ Powers Act 2014 to allow the whole of the presumptive share to be advanced to a beneficiary.

·         There is no power under s.32 or under any other statutory provision to advance capital to a life tenant.  There is also no statutory power which enables trustees to lend money to a life tenant.  If the Testator wishes to give the trustees such power he must do so by express provision.

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