Law Commission Consultation - sections 31 and 32 Trustee Act 1925

In a Supplementary Consultation Paper  the Law Commission reviewed sections 31 and 32 of the Trustee Act 1925, in order to generate responses, provisional proposals and questions, with a view to making recommendations for reform.  It is supplementary to the Intestacy and Family Provision Claims of Death (2009) Law Commission Consultation Paper No 191.

Under the intestacy rules, adults can take their shares of the estate outright but minors who are not married or in a civil partnership cannot do so.  Their shares are held in trust, on what are known as the "statutory trusts" (see section 47 of the Administration of Estates Act 1925).  These trusts are supplemented by sections 31 of the Trustee Act 1925, dealing with income, and section 32 of that Act, dealing with capital.  The further consultation is being made so that the reform of the two sections can be considered not only in the context of intestacy, but across  all trusts.

Their proposals are as follows:

SECTION 32: THE RESTRICTION TO ONE-HALF OF A BENEFICIARY’S SHARE

4.3 We provisionally propose that the power contained in section 32 of the Trustee Act 1925 to pay or apply capital to or for the benefit of a trust beneficiary should be extended, for the purposes of all trusts however established, to the whole, rather than one-half, of the beneficiary’s share in the trust fund. 

SECTION 31: THE SECTION 31(1) POWER

4.4 We provisionally propose that the second part of the proviso to section 31(1) (the requirement that trustees should only pay a proportionate part of the income where they have notice that the income of another fund is applicable for the same purposes) should be removed. 

…

4.5 We ask consultees whether further changes should be made to the power to pay or apply income for a beneficiary’s maintenance, education or benefit contained in section 31(1) of the Trustee Act 1925, and in particular whether it would be beneficial to make one or both of the following amendments: 

(1) delete the first part of the proviso to section 31(1); 

(2) redraft section 31(1)(i) so as to remove the words “as may, in all the circumstances, be reasonable” and substitute an unfettered discretion. 

Responses should be sent either:

By email to:  propertyandtrust@lawcommission.gsi.gov.uk or

By post to: Sarah Hansen, Law Commission, Steel House, 11 Tothill Street, London SW1H 9LJ

  Tel: 020 3334 0298 / Fax: 020 3334 0201

Link: The paper can be found here.