Goldstein and McKenzie, ‘Excluding beneficiaries: a decision not to be taken lightly’

The power to exclude beneficiaries is a little different from other powers given to trustees which must all be exercised in the best interests of the beneficiaries. In the case of exclusion, however, it will not in general, for obvious reasons, be in the interests of the person being excluded (except where there is a fiscal advantage to that person in the exclusion). Instead it may be exercised in the interests of the remaining beneficiaries, will be distinctly averse to the interests of the beneficiary being excluded and once the beneficiary has been excluded he can take no further interest under the settlement (although, of course, the precise scope of the exclusion will depend upon the terms of the power). The trustee is therefore under an obligation to properly consider the position of the person being excluded and as with all powers conveyed on a trustee, the power must be exercised carefully and not capriciously or in bad faith.

Claire Goldstein and André McKenzie, Excluding beneficiaries: a decision not to be taken lightly, Trusts and Trustees, Published: 10 October 2021.

First posted 2021-10-14 15:00:22

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