Drafting Trusts and Will Trusts in Canada, by James Kessler and Fiona Hunter (Markham: Lexis Nexis Butterworths, 2003, 410pp., hard cover, $125.00)

Canadian trust law is derived from, and (at least in part) owes its continuing development to, the English law of trusts. However, over time, differences have developed between our trust law and that of England, especially through statutory change. There are, in addition, some differences in practice. Most importantly, there are the significant differences between the two tax regimes. Over time, the chasm between their trust law and ours will widen. With all these differences, useful reference to standard English trust texts, precedents or ceases can be treacherous, except for those who are doing serious research or who have a background in English law. Fortunately, Drafting Trusts and will Trusts in Canada makes English law, precedents and practice available to Canadian lawyers.

James Kessler, Q.C., the English co-author of this text, is a barrister who drafted the Standard Provisions of the Society of Trust and Estate Practitioners and is a prolific writer in the United Kingdom on trusts and tax. He has written Drafting Trusts and Will Trusts (now in its sixth edition) for a mainly English audience. (The local tax references make that book partially inaccessible to Canadian lawyers.) Fiona Hunter, a Canadian lawyer, is the book’s co-author. To her fell the interesting but onerous task of "Canadianizing" the English text – a task that was much bigger than it might first appear.

That task involved replacing the United Kingdom tax reference with their Canadian equivalents. The differences between the United Kingdom and Canada with respect to the taxation of trusts and taxation on death required a complete rewriting and, as well, some entirely new chapters. For example, there is a separate chapter on alter-ego trusts and joint-partner trusts, as well as another one on spouse trusts. Ms Hunter also had to add Canadian reference where relevant. More important, she had to be cognizant of both the similarities and the differences between the English law of trusts and the Canadian law of trusts – an intellectually interesting, yet time-consuming endeavour.

For a Canadian lawyer, the result of these efforts is a very readable text on trust drafting. The large number of English case reference, still the majority in the book, show how much our existing trust law continues to resemble that of England. With the increasing internationalization of trusts, that resemblance makes a readier access to English law all the more helpful.

We sometimes forget that trust law is not the same everywhere in common law Canada. For example, both the rule against perpetuities and the rule against accumulations vary across Canada. Ms Hunter sets out many of the provincial differences, including references to the many provincial law reform commission reports.

The book’s stated purpose is "to aid the generalist by discussing general and technical issues which arise in the drafting of trusts and will trusts, and to provide precedents". The authors fulfil this objective, but understate the book’s accomplishments. This book is valuable not only for the generalist; the more knowledgeable trust lawyer who has a specific drafting concern or who is involved in an interpretation or legal issue involving a term in a trust will find this book to be a useful starting point – and perhaps even the ending point. To this reviewer’s knowledge, there is no other Canadian book on trust drafting. This book fills the gap.

The author’s guiding principle to drafting is clarity, which involves the deletion of excess verbiage and old phrasing, as well as the use of plain language. In the past, the style of drafting in the field of trusts and conveyancing fell behind the style of drafting in other arrears of the law. This has changed in England, and is changing in Canada. For example, the authors point out that the word "witnesseth" while rare in England, is dying a surprisingly gradual death in Canada.

Beginning with several chapters dealing with drafting style and interpretation, the book goes on to cover all aspects of trusts. Here is a partial list of chapters:

• Trustees Powers
• Overriding Powers (Appointment, Re-Settlement and Advancement)
• Spouse Trusts
• Alter Ego Trusts and Joint Partner Trusts
• Discretionary Trusts
• Will Trusts
• Administrative Provisions
• Trusts of Life Insurance Policies
• Charitable and Non-Charitable Purpose Trusts
• Trusts for Disabled Beneficiaries
• Governing Law
• Restricting Rights of beneficiaries

The authors point out the differences frequently observed between the drafting of an inter vivos trust, on the one hand, and the drafting of a testamentary trust, on the other hand. "The great distinction in common practice is that a lifetime trust is generally a lengthy document drawn up with some care; a will trust is too often a short document and drawn up without much thought". The respective drafting styles for inter vivos trusts and testamentary trusts often differ for no apparent reason. For example, definitions are widely used in drafting inter vivos trusts but less so in drafting wills. "The distinction is not justifiable and only reflects the lower quality of will drafting".

The authors offer a number of comments and suggestions that are not widely known or widely used in Canada. For example, in an inter vivos trust the settlor may, years after the trust has been settled, regret that the class of beneficiaries is not wide enough to include some other person(s). In England, a common solution to this problem is to include a power to add beneficiaries. In Canada, where inter vivos trusts tend to be irrevocable, this power is rarely given to trustees, perhaps out of fear on the part of the Canadian settlor. To be sure that his or other wishes are not frustrated, the settlor would wish to see some constraints on such a power, were it bestowed on the trustee. Obviously, the best constraint would be to confer such a power on the settlor himself or herself. Unfortunately in Canada, for most inter vivos trusts, bestowing such a power on the settlor results in undesirable tax consequences. The settlor may consider other controls on the exercise of the power of others to expand the class of beneficiaries: for example, appointment of a protector or requiring approval for any expansion of the class of beneficiaries by a minimum number of the existing beneficiaries.

Also included in the book is a chapter on planning for the incapacitated settlor. Obviously an incapacitated settlor cannot instruct a lawyer. However, recent jurisprudence would support the view that an incapacitated settlor’s attorney or guardian can, within certain limits, settle a trust on the settlor’s behalf. Should the settlor recover from his or her incapacity, an overriding power (discussed in another chapter) would permit the settlor to recover the assets transferred to the trust.

The book is well indexed and contains a detailed table of contents, making it easy to find a reference to any particular drafting or legal concern. There are precedents for both inter vivos and testamentary trusts, with a CD-ROM for the precedents. We lawyers are not well known for our writing style. The authors of Drafting Trusts and Will Trusts in Canada set a high standard for good writing, sprinkling references to literature and legal history throughout the book. Except for consideration of taxation, where the rules often change suddenly and unpredictably, the book should remain current for year. This book will be useful for anyone involved in trusts, both inter vivos and testamentary, whether as drafters, interpreters or litigators.

Howard S. Simmons