29:
224:, with no requirement that the alterations be for their benefit. The courts have interpreted the Act's scope fairly widely, stating that almost any "variation" is acceptable, and that "benefit" may mean not just a financial benefit, but also a social or moral one. Despite initial fears that it would allow tax planners another way to hide funds and create a back-and-forth fight between the
272:"to consider whether any alteration is desirable in the powers of the court to sanction a variation in the trusts of a settlement in the interests of beneficiaries under disability and unborn persons, with particular reference to the decision in Chapman v. Chapman", and a report was presented to Parliament in November of that year. A draft bill was drawn up and introduced by
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property subject to the trusts". This power can be exercised for people in one of four categories: beneficiaries who are incapable of assenting to the change (infants or those who are otherwise incapable); individuals who may "be entitled" to be beneficiaries in the future, but who are not at present; unborn beneficiaries; or people who may be beneficiaries under
325:
ruled that the word "arrangement" was "deliberately used in the widest possible senses so as to cover any proposal which any person may put forward for varying or revoking the trusts", essentially allowing the courts the right to make any alteration whatsoever. Despite this, the Court of Appeal noted
296:
The Act gives the courts almost unlimited power to exercise their jurisdiction to form "compromise" agreements, with
Section 1(1) allowing them to approve "any arrangement...varying or revoking all or any of the trusts or enlarging the powers of the trustees of managing or administering any of the
241:
Prior to the 1950s, the courts commonly accepted that they could approve a "compromise" agreement where there was a dispute over the precise meaning of words in a trust document. In some cases, the courts used this to rearrange trusts for the benefit of certain parties (such as minors) where there
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The Act gave the courts near-unlimited discretion to approve "compromise" agreements, for the benefit of infants or other incapable individuals, for individuals who may become beneficiaries, or for unborn beneficiaries. The courts are also able to approve agreements for individuals who may be
373:
While some critics feared that granting the courts unlimited jurisdiction would create "a most undignified game of chess between the
Chancery Division and the legislature", and that it allowed tax planners another way to hide funds, the Act received general approval at the time. It was later
352:, they have found that if the claimant, a member of a class of beneficiaries, applies and cannot benefit (although other members of the class can), the court is obliged to refuse the request. It is debatable as to whether the intentions of the testator should be taken into account; in
185:
that governs the courts' ability to vary the terms of trust documents. Prior to the 1950s, the courts were willing to approve "compromise" agreements as to what terms meant, not only when they were disputed but also for the benefit of certain parties, such as minors. In 1954, the
301:. The first three classes may only have a "compromise" agreement if the alterations are for their benefit, while potential beneficiaries under protective trusts have no such limit. The courts have chosen to interpret "benefit" widely, increasing their powers to alter trusts; in
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that this power was reserved for a genuine dispute. This decision caused frustration: where previously all trusts could be varied, either through the court's ability to create a "compromise" agreement or the rights granted to trusts which came under the
314:
said that "the word benefit is... plainly not confined to financial benefit, but may extend to social or moral benefit". Under
Section 1(3), the Act does not apply to trusts created by an Act of Parliament. The wide scope of the act was quantified in
378:. The second class of beneficiaries covered in Section 1(1) caused problems for the courts; since it only allows the court to alter a trust document where a person "may be entitled", nothing can be done once this entitlement is confirmed.
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and
Parliament, the Act was met with general approval. The ability of the courts to alter trustees' investment powers under the Act was criticised as slow and expensive, and as a result this is now covered by the
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There is the question as to what to do with proposed "compromise" agreements where it is not certain that a benefit will ensue. In this situation, the courts have sometimes agreed to take the chance, as in
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criticised as expensive and slow in regards to allowing trustees the right to alter their investment powers, and this part of the Act was later superseded by the
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that the court would not permit a compromise agreement where it not only varied the terms of the trust but constituted the creation of an entirely new one.
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An Act to extend the jurisdiction of courts of law to vary trusts in the interests of beneficiaries and sanction dealings with trust property
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that this would no longer be permitted, creating a gap between the rights of trusts under the
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the courts refused to alter a trust document, partially due to the testator's wishes; in
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as in force today (including any amendments) within the United
Kingdom, from
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limited this right to those created under the 1925 Act. In
January 1957 the
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on 23 July 1958, and came into force as the
Variation of Trusts Act 1958.
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introduced the
Variation of Trusts Bill to Parliament, where it was given
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Price, Leolin (1959). "Variation of Trusts Act, 1958".
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204:decision). As a result, following a report by the
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431:"Business of the House (Hansard, 12 June 1958"
370:, however, the court took the opposite view.
588:Edwards, Richard; Nigel Stockwell (2007).
242:was no real dispute. In 1954 however, the
157:Text of the Variation of Trusts Act 1958
668:United Kingdom Acts of Parliament 1958
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459:"Royal Assent (Hansard, 23 July 1958)"
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625:
611:(6th ed.). Routledge-Cavendish.
150:Text of statute as originally enacted
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592:(8th ed.). Pearson Longman.
183:Parliament of the United Kingdom
34:Parliament of the United Kingdom
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171:Variation of Trusts Act 1958
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22:Variation of Trusts Act 1958
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653:(6). Blackwell Publishing.
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355:Re Steed's Will Trusts
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126:Mental Health Act 1983
122:Mental Health Act 1959
118:County Courts Act 1959
258:Settled Land Act 1925
198:Settled Land Act 1925
638:Blackwell Publishing
575:Edwards (2007) p.174
548:Edwards (2007) p.179
539:Edwards (2007) p.178
530:Edwards (2007) p.177
512:Edwards (2007) p.173
494:Edwards (2007) p.175
411:Edwards (2007) p.171
402:Edwards (2007) p.166
393:Edwards (2007) p.165
341:Re Holt's Settlement
304:Re Holt's Settlement
278:Member of Parliament
270:Law Reform Committee
220:beneficiaries under
206:Law Reform Committee
521:Hudson (2009) p.446
485:Hudson (2009) p.445
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673:English trusts law
566:Price (1961) p.739
161:legislation.gov.uk
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647:Modern Law Review
629:Modern Law Review
609:Equity and Trusts
599:978-1-4058-4684-4
590:Trusts and Equity
557:Price (1959) p.59
503:Price (1959) p.58
420:Price (1959) p.56
299:protective trusts
288:on 23 July 1958.
282:Ruislip-Northwood
249:Chapman v Chapman
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222:protective trusts
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368:2 All ER 554
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350:3 All ER 139
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321:, where the
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308:1 All ER 470
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286:royal assent
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214:royal assent
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104:23 July 1958
100:Commencement
94:23 July 1958
90:Royal assent
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471:23 February
443:23 February
246:decided in
190:decided in
662:Categories
382:References
268:asked the
237:Background
132:Relates to
114:Amended by
42:Long title
312:Megarry J
359:1 All ER
52:Citation
262:Chapman
202:Chapman
181:of the
59:. c. 53
615:
596:
333:Ch 158
276:, the
253:AC 429
636:(1).
84:Dates
613:ISBN
594:ISBN
473:2010
445:2010
280:for
169:The
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292:Act
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