Drafting Trusts and Will Trusts

Review by Francis Barlow

James Kessler brings the combined experience of a draftsman and tax practitioner to his new book on trust drafting and has succeeded in producing an impressive and valuable treatise on the subject. Although the book contains a number of precedents, it is not so much a precedent book as a book about the technique of trust drafting, both generally and with particular reference to the three typical settlements of our day, the interest in possession settlement, the accumulation and maintenance settlement and (to a lesser extent) the discretionary settlement. The author's discussion of the general and technical considerations involved is the most valuable part of the book. The section on trust drafting, which takes up the major part of the work, contains a wealth of material both in the text and in the footnotes. There will be few practitioners, however experienced, who will not discover some unfamiliar proposition or a specific authority for a proposition which they have taken for granted for years.

The book might perhaps have been more accurately titled "Drafting Trusts", as there is no separate discussion of the drafting problems peculiar to wills, e.g. the form of administration trust, "puzzle corner", the incidence of inheritance tax where business or agricultural property is included in the estate and the interaction of the spouse exemption and the business and agricultural property reliefs. (It is true that some of these matters involve questions of tax planning which are beyond the scope of the book, but even so they can have a direct bearing on the drafting of wills.) There are a few precedents for wills, but these are virtually indistinguishable from the trust precedents, merely having an administration clause tacked on to the front incorporating Form 8 of the Statutory Will Forms.

This perhaps is not so significant an omission in a book which is primarily about drafting technique, which is where its main interest lies. In the chapter on "Style", the author makes some interesting observations on such matter as the use of punctuation, paragraphing and indentation and the avoidance of archaic and prolix forms. The chapters which follow contain many specimen clauses which exemplify the author's own drafting technique. Drafting is very much a matter of personal taste and habit and there will be many practitioners, especially those nurtured on the elegant periods of Rose and Bowles' Conveyancing Precedents who may find the author's stye uncongenial. The work is subtitled "A Modern Approach" and the author's drafting style certainly lives up to the promise of the subtitle. There is no sentimental attachment to traditional drafting forms. Trust documents must henceforth (itself no doubt a prohibited word) be written in simple plain English which the lay client will comprehend. Two words will not be permitted where one will suffice.

In principle the author's approach to drafting is unexceptionable; needless obscurity is certainly no merit. If this approach sometimes gives rise to a rather staccato style of drafting, this does not matter if nothing is lost in the process. However, it seems to this reviewer that the pursuit of brevity does on occasion lead to ambiguity. For example, the phrase "spouses, and former spouses" in the definition of "the Beneficiaries" on page 96, which is adopted in preference to the lengthier form "spouses, widows, widowers (whether or not remarried)", certainly has the merit of brevity. But is it entirely clear that the expression "former spouse" includes a widow or widower, especially in cases where the word "widow" is used in close juxtaposition, as in the definition of "the Beneficiaries" appearing on page 92? In common parlance the expression "former wife" or "former husband" is used to mean spouses who are divorced rather than widows or widowers. The expression "former spouses" may possible have a wider meaning, but is this sufficiently clear to justify running any risk? Another example is the form for a power of appropriation which is recommended by the author on page 213 and which reappears on page 288 in the precedent for administrative powers. This form is commendably short, but it is not obvious that it would authorise an appropriation of property to a settled share. In fact the form is not much shorter than the more usual form (set out on p.21) incorporating by reference the elaborate code contained in section 41 of the Administration of Estates Act 1925, which expressly authorises appropriation in satisfaction of settled interests. Would it not be safer to adopt the traditional formula?

The author justifies the use of an express power of appropriation on the ground that not everyone is familiar with the statutory power and that its terms should therefore be set out in full. But he is not consistent on this point. The incorporation in the will precedents of administration trusts by reference to Statutory Will Form No. 8 has already been noted. And at pages 194-195 the author actually recommends the incorporation by reference to the powers contained in the Society of Trust and Estate Practitioners Standard Provisions!

This raises an important point of principle. One can certainly sympathise with the author's desire to make trust documents intelligible to the layman. However, settlements and wills are technically documents which have important legal and fiscal consequences. The use of novel formulae, however brief and clear they may appear to be, can give rise to unforeseen difficulties. There is a strong case for using tried and tested formulae even if their meaning is sometimes less accessible to the layman. The wording of trust documents, however simple and clear in appearance, can be deceptive to the untrained eye and it may be no bad thing if lay trustees are encouraged to take legal advice on their meaning.

But regardless of one's stance on matters of drafting style, James Kessler's book is on any view an impressive, thought-provoking and learned work which is lucidly written and elegantly produced. Any trust practitioner of whatever vintage will profit from reading it. Even if he is not persuaded to abandon his own precedents, the obvious good sense in many of the author's comments will at least cause him to review them with a fresh and more critical eye.

Private Client Business

(Sweet & Maxwell)

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