Drafting Trusts and Will Trusts
Review by Ralph Ray
The second edition, like the first, is a breath of fresh air, overcoming the stuffiness of many legal precedents which can and often do exasperate the client.
The book covers the following main aspects:
* A general treatise on trust drafting;
* the role of beneficiaries and trustees including trustees' powers and duties;
* the usual provisions of a settlement;
* analysis of the main types of lifetime trusts, namely interest in possession, accumulation and maintenance and discretionary trusts;
* will trusts (although this subject has relatively scanty treatment);
* administrative provisions.
In the second part of the book various useful and succinct precedents ae set out for lifetime trusts and certain will trusts, together with detailed administrative provisions including the invaluable standard provisions of the Society of the Trust and Estate Practitioners. These standard provisions are an enormous asset and can be incorporated in a lifetime or will by using the words "the standard provisions of the Society of Trust and Estate Practitioners (First edition) shall apply". The provisions have been formally recognised by the Probate Registries. The inclusion in the book of a disk containing these precedents is extremely valuable.
The book goes a long way beyond just dealing with pure drafting and covers many relevant topics involving trusts in a wider context.
The author certainly has the art of drafting simply and clearly, for example "a trustee may delegate in writing any of his functions to any person anywhere in the world"; "the trustees may insure trust property for any amount against any risk" and "the trustees may pay or apply trust property for the advancement or benefit of any beneficiary". The author's approach is that trustees should be trusted with wide powers which helps in brevity and clarity as does his welcome use of punctuation. In other context Mr Kessler states "one need not pack a wetsuit to cross the Sahara".
The reviewer likes the edifice very much but would appreciate a rearrangement of the furniture. My own view is that the author spends too much space on dealing with clauses in which he disapproves and should concentrate on and emphasise the provisions which are correct. For example, on page 223 he summarises a highly dangerous use of absolute gifts to spouses with deeds of variation. As a result of such suggested curtailment in the precedent section there should be more cross-references to the analysis in the first part and additional precedents could be included, for example explanatory letters to clients. Moreover, some subjects, such as demerger, are treated too briefly and others, such as shares and trusts, are not dealt with at all. In the context of delegation a reference to CREST would be useful.
Unfortunately there are still some defects; the author sometimes uses terms which may puzzle the average practitioner, for example "prolix forms". On page 21 the author states "as a general rule it is better to set text out in full and not to incorporate text by reference" - is this not in contradiction to the STEP provisions? On page 54 the statement "the appointment of the settlor (or his spouse) as trustees does not have any tax or other drawback"; this is surely an over-simplification. On page 78 "the usual practice is to leave the rule of unanimity [as to trustees' decisions] to apply" - this is contrary to the reviewer's experience. Precedent P1 (trust in possession settlement for child of settlor) does not have any reference to excluding section 31, Trustee Act 1925 which is of vital importance for the minor children and so as to avoid additional capital gains tax liability in particular; Mr Kessler does emphasise this in paragraph 7-015. On page 337 at P3-037 the reviewer is unable to follow the suggested amendment to the stated clause numbers.
However, this review must not disintegrate into nit-picking. The reviewer highly recommends the book as a refreshing and practical approach to a difficult subject.
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is information on how to buy James Kessler's books.
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