Powered by Lexis+®
View all Glossary Terms Related Content
Related Glossary Terms
CASE STUDY
“A lot of the work that I do is historic-the maximum sentences change at different points of time. It's really complicated and people get it wrong all the time. That's when having a timeline is really useful.”
1 High PavementAccess all documents on Dispositive powers
Dispositive powers meaning
What does Dispositive powers mean?
Dispositive powers are the powers in a trust, will or settlement that let the holder (typically trustees or a donee of a power of appointment) decide who receives income or capital, in what amounts and when. They directly affect beneficiaries’ beneficial entitlements, and are contrasted with administrative or management powers.
Common examples include powers to distribute or withhold income, appoint or advance capital, accumulate income, vary shares between beneficiaries, add or exclude beneficiaries where permitted, appropriate particular assets to a beneficiary, or bring forward the termination of a trust. In discretionary trusts, these powers determine the pattern of benefit among a class of objects.
This is a descriptive expression used across UK and Irish trust and estates practice rather than a term generally defined by legislation. Its core features are broadly consistent in England and Wales, Scotland, Northern Ireland and Ireland: dispositive powers are fiduciary, must be exercised for their proper purpose, within the scope of the instrument, taking relevant matters into account, and not for collateral ends (the “fraud on a power” principle). Their exercise carries significant tax and risk implications and is commonly recorded by trustee resolutions or deeds of appointment.
Speed up all aspects of your legal work with tools that help you to work faster and smarter. Win cases, close deals and grow your business–all whilst saving time and reducing risk.
View the related Practice Notes about Dispositive powers
PRACTICE NOTES
Delegation of trustees’ functions: agents, nominees, custodians and powers of attorney under the Trustee Act 2000, Trustee Delegation Act 1999, Trustee Act 1925 and TOLATA 1996 (England and Wales)
Duty to act personally As a matter of principle, the basic rule is that a trustee must act in person because the settlor personally selected that individual for their specific skill or insight into the beneficiaries, and their affairs. The Trustee Delegation Act 1999 (TDA 1999) allows trustees, in defined situations, to delegate on an individual basis. The Trustee Act 2000 (TrA 2000) outlines the trustees’ default powers of collective delegation where the trust deed does not confer broader express powers. In essence, trustees may pass on most administrative tasks, but not dispositive powers. Agents, nominees and custodians Under the TrA 2000, the management of trust assets may now be entrusted to others, and trustees can appoint specified persons to serve as nominees for the trust. Collective delegation TrA 2000, Pt IV (ss 11–27) provides for trustees to delegate administrative powers and discretions. This operates subject to any limitation or exclusion imposed by the trust instrument, or by any enactment or subordinate legislation; any such...
30 May
Read More 
PRACTICE NOTES
Scotland: Trustee powers (including investment), duties, decision-making, court powers, advances, remuneration and liability; current law and reforms under the Trusts and Succession (Scotland) Act 2024
FORTHCOMING CHANGE : On 30 January 2024, the Trusts and Succession (Scotland) Act 2024 obtained Royal Assent, representing the first significant review of trusts law in Scotland in more than a century since the principal Trusts (Scotland) Act 1921. Provisions concerning trusts will commence only when Scottish Ministers introduce the necessary secondary legislation, whereas certain succession provisions came into force on 30 April 2024. The main reforms aimed at modernising the law are outlined in News Analysis: Trusts and Succession (Scotland) Bill passed. Practice Notes covering aspects of Scottish trusts and succession law will be further updated to align with this new legislation. At the outset, note that powers authorise trustees to act and advance the trust purposes, while duties oblige trustees to discharge an obligation. Source of trustees’ powers Trustees derive their authority from both the prevailing law and the relevant deed of trust. Their powers arise from a body of statutory measures, including: Trusts (Scotland) Act 1921 (T(S)A 1921) Trusts (Scotland)...
22 May
Read More
PRACTICE NOTES
Trusts and Trust Drafting Training for Junior Lawyers: Components, Classification, Interest in Possession and Discretionary Trusts, Perpetuities, Accumulations, Powers, Exclusions and Administrative Provisions
Use the link beneath to obtain the training slides. Contents Core elements of a trust Types of trusts Express trusts Interest in possession trusts Discretionary trusts Perpetuities Accumulations Trust drafting—summary Trust drafting—Parties and Background Trust drafting—definitions Trust drafting—dispositive Trust drafting—powers Trust drafting—further essentials ...
22 May
Read More 
