Revocation and variation of trusts
9.1The general rule is that trusts, once established, cannot be varied. One of a trustee’s core duties – his or her “very plainest duty” – is to adhere to the terms of the trust. However, changes in law, taxation rules and family circumstances can mean that trust deeds need to be modified to enable the trust property to be dealt with or the trust administered in a way that was not provided for at the outset. The law has therefore long recognised that there are circumstances where, notwithstanding the general rule, trusts should be able to be varied, brought to an end (revoked) or even resettled onto new trusts. This topic was discussed in the Third Issues Paper.
9.2In this chapter we put forward proposals for reform relating to the revocation and variation of trusts. The specific topics examined are:
- revocation and variation by beneficiaries;
- revocation and variation by the High Court on behalf of beneficiaries (section 64A of the Trustee Act 1956);
- extension of the trustee’s powers by the High Court (section 64 of the Trustee Act); and
- variation pursuant to a power in a trust deed.