There is no possibility of claiming a breach of trust or asking for an administration order in respect of a trust if it cannot be proved that one actually exists. On the other side of the coin, from a potential defendant's point of view, the proof that there is not a trust will let them off the hook. Establishment A trust may be created by a settlor in one of two ways: • by a declaration that they (as trustees) hold particular property absolutely for another or • by a transfer of assets to independent trustees on the basis that they will hold the property for specific individuals No matter what route is chosen, the declaration must be irrevocable and the trust must be fully constituted. In practical terms, as soon as the settlor has done everything to effect a transfer of the property then the settlement will be irrevocable. The test is whether anything remains to be done by the settlor and not by the beneficiaries or trustees. A basic formulation of the

Examples of claims against trustees for breach of investment duties are: • delay—where a trustee takes too long to invest trust assets • making bad investment decisions—such as investing irresponsibly in high risk, undiversified, investments • making unauthorised investments—for example, by ignoring a direction to invest in particular assets only • failing to invest the trust fund as required Trustees' powers of investment Trustees should only make authorised investments. It is necessary to consider: • the statutory general power of investment • any additional powers, or exclusion or restriction contained in the trust instrument The ‘general power of investment’ empowers trustees to ‘make any kind of investment that they could make if he or she were absolutely entitled to the assets of the trust’. The exception to this concerns ‘investments in land other than in loans secured on land’. They are governed by a separate provision (see ‘Investments in land’ below). The ‘general power of investment’ is in addition to powers conferred on trustees otherwise than under the Trustee

It is difficult to determine in which way to advise a trustee accused of a breach of trust, as the dividing line between a full defence and relying on the court excusing the trustee's actions for a palpable breach is thin. There are a number of avenues the practitioner can explore. Acting honestly and reasonably—section 61 of Trustee Act 1925 This is very useful for the lay trustee and while it offers hope to the professional trustee, it will be more difficult to persuade the court to exercise its discretion in their favour. As has been said: '… a paid trustee is expected to exercise a higher standard of diligence and knowledge than an unpaid trustee.' The section provides: 'If it appears to the court that a trustee, whether appointed by the court or otherwise, is or may be personally liable for any breach of trust, whether the transaction alleged to be a breach of trust occurred before or after the commencement of this Act, but has acted honestly and reasonably, and

Remedies come in a number of shapes and sizes but can be roughly divided into those that are personal and those that are proprietary. The difference between the two can be summarised as being an attack on the guilty party (personal) and a claim to dispossessed trust property (proprietary). An example of a personal remedy would be an action against a trustee in breach and an example of a proprietary remedy would be an action against a third party who had acquired trust property to recover that property. There may then be the problem of seeking to recover property that has been assigned by a third party and that may no longer be in an identifiable form. There may be a personal remedy against the third party on the basis of their position as a constructive trustee and thus, their breach of trust. So far as proprietary remedies are concerned, these exist to a limited extent at common law but are more extensive in equity. There are a number of advantages of seeking

The issue of sham is most likely to be raised by the settlor's creditors or former spouse if the settlor is involved in matrimonial proceedings, who will seek to argue that the assets transferred to the trustees still belong to the settlor, so are available to them for the purposes of enforcing an order of the court. If a trust is held to be a sham, it will usually be void with the trust assets reverting to the settlor's ownership. A sham is a pretence, with the settlor and possibly also, the trustees, lacking the necessary intention to create a valid trust. They instead intend to create the impression to third parties and to the court, that they have created a valid trust by purportedly transferring the legal title to property to the trustees and the equitable interest in the property to the beneficiaries but in reality, retaining ownership of the property with the assistance, knowing or otherwise, of the trustees, as principal and agent/nominee on a bare trust for the settlor. It is the intention to deceive

Existence and validity of trusts Topic Case name Summary Author Jurisdiction Existence and validity of trusts Provincial Equity Finance Ltd v Dines (née Breda) [2023] EWHC 103 (Ch) News Analysis: ‘By prosperous voyages I often made…And the great care of goods at random left’—resulting trust and the dominion of express trusts (Provincial Equity Finance Ltd v Dines and a Tragedy of Errors)This case demonstrates the practical difficulty of establishing a claim for resulting trust where a chaotic deceased used bank accounts for mixed purposes and establishes that an express trust may supplant the presumption of resulting trust even where the party advancing funds is not a party to the express trust. Nicholas Holland, McDermott Will & Emery UK LLP England & Wales Existence and validity of trusts Attorney General v Zedra Fiduciary Services (UK) Ltd and others [2022] EWHC 102 (Ch) News Analysis: Cy près scheme approved for £600m charitable trust to be applied to reduce the National Debt (Attorney General v Zedra Fiduciary Services (UK) Ltd)Examines the court’s determination of the appropriate

This Practice Note covers the purpose and procedure of section 41 of the Trustee Act 1925 (TA 1925), which confers jurisdiction on the court to appoint or replace trustees in certain circumstances. This is a jurisdiction of last resort and this Practice Note explains the circumstances where it may apply. It also considers alternative routes that may be available to practitioners and distinguishes between the applicability of TA 1925, s 41 and the court’s inherent jurisdiction to remove trustees. TA 1925, s 41 confers a statutory jurisdiction on the court to appoint a new trustee whether in place of or in addition to the existing trustees. TA 1925, s 41 provides as follows: ‘Power of court to appoint new trustees (1) The court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient difficult or impracticable so to do without the assistance of the court, make an order appointing a new trustee or new trustees either in

This Practice Note is a collection of Q&As concerning trust drafting issues that may arise on creation and during the lifespan of a trust. For example, whether the accumulation period can be varied, whether trustees can be given certain powers, whether a deed is required for an appointment or release and how beneficiaries are added or excluded. It should be noted that although new Q&As are added to this Practice Note as they become available, individual Q&As are not currently maintained and state the law as at the date indicated in each case. For further guidance on the creation of trusts, see: Creation of trusts—overview and on the administration of trusts, see: Administration of trusts—overview. Can the accumulation period be varied? This Q&A considers the options to vary the accumulation period for a trust made prior to 6 April 2010 when the Perpetuities and Accumulations Act 2009 came into force: Can a pre-2010 discretionary trust be varied to alter the accumulation period, where the primary beneficiary is 21 and has learning disabilities? For further guidance on accumulations, see Practice Note: Perpetuities

This Practice Note outlines the rules governing expenses incurred by trustees running a trust. Tax deductible expenses As for individuals and trading organisations, expenses are deducted from certain categories of income to arrive at a taxable profit. Where trustees are engaged in a trade, the trading profit is taxable as a source of income. Profits are calculated in accordance with generally accepted accounting practice. Expenses incurred 'wholly and exclusively' for the purposes of the trade are deducted from trading income. Mostly, it is clear which expenses relate to the trade and are therefore fully deductible, but some expenses will need to be apportioned. In the area of professional fees, for example, there is likely to be overlap and blending of the purposes for which they are incurred. An obvious example would be the accountancy fees for preparing the trade and trust accounts, particularly if the trading accounts are integrated into the trust accounts. The expenses of running a large trust may include office costs, which for the sake of convenience are combined with the office costs of the trade.

Trust for London has published a briefing calling on the government to ensure the new Fair Work Agency (FWA), which is due to launch in April 2026, is built on the right foundations to work for all workers, including those most at risk of exploitation. The FWA is intended to bring together the functions of three existing enforcement bodies into a single entity designed to tackle labour market abuses. However, the briefing warns that without getting these foundations right, the FWA risks repeating the failures of the fragmented and under-resourced system it is intended to replace.

A report funded by Trust for London and conducted by the Centre for Social Policy Studies has highlighted significant issues with the No Recourse to Public Funds (NRPF) policy. The study reveals that NRPF is driving migrants into poverty, with an estimated 208,000 households at risk of destitution nationwide. In London alone, 120,000 households with NRPF are at risk, whilst 36,900 are already in poverty. The policy disproportionately affects women and children, including British citizens, and cost London boroughs nearly £50 million in 2022/23 (in providing support further to their statutory duties to support people in need). The report argues that NFPF is not meeting its policy objectives, and makes a number of recommendations.

This TRUST is made on [date] Parties 1 [settlor] of [address] (the Settlor) and 2 [original trustees] of [addresses] (the Original Trustees) Background (A) The settlor wishes to make this Trust and has transferred to the Original Trustees the assets described in Schedule 1 to be held on the following trusts. (B) The Principal Beneficiary is a disabled person within the meaning of that term in the Finance Act 2005, Schedule 1A. This Deed PROVIDES: 1 Definitions and interpretation In this Trust: 1.1 Discretionary Beneficiaries • means (a) any spouse or [widower OR widow] whether or not remarried of the Principal Beneficiary; (b) the descendants of the Principal Beneficiary; (c) the spouses, widows or widowers (whether or not remarried) of the descendants of the Principal Beneficiary; 1.2 Principal Beneficiary • means [disabled person]; 1.3 spouse • shall include a civil partner registered under the Civil Partnership Act 2004 and a spouse of the same sex, and a person is a surviving spouse whether or not they have remarried or entered into another civil partnership and widow and widower shall be construed accordingly; 1.4 Specified Amount • means an amount which does not exceed the annual limit defined in section 89(3A) of the Inheritance Tax Act 1984; 1.5 Trust Fund • means the assets described in Schedule 1,