News In Focus
15 December 2005
Trusts back in Commission spotlight
The Scottish Law Commission today publishes the fourth discussion paper in its trust law review programme, focusing on variation and termination of private trusts and the reorganisation of public trusts.
The Commission suggests enshrining in statute the present rule that where all the beneficiaries are of full age (at least 18) and capacity, and no purposes require the trust to continue, they can agree among themselves to vary or terminate the trust. In some countries this cannot be done wthout consent of the truster but the Commission does not support such a rule.
Views are invited on whether the number of cases in which the court has to be involved should be reduced by allowing parents to agree on behalf of children under 16, and those aged 16 or 17 to agree for themselves.
The Commission would also like to make it easier to achieve variation or termination through the court where there are potential beneficiaries with only a remote prospect of benefiting. Such interests must still be safeguarded and ways of doing this are put forward. It is also suggested that the court be empowered to override a refusal to consent by capable adults or approve on behalf of someone who cannot be traced.
For non-charitable public trusts and educational endowments, the Commission proposes to allow reorganisation without going to court, under procedures similar to those now in place for charitable trusts under the recent Act passed by the Scottish Parliament.
The discussion paper (no 129) can be viewed at http://www.scotlawcom.gov.uk/html/discussion_papers.html . Comments are invited by 17 March 2006.