Giving Powers to Non-Trustees
When I recently had occasion to consider the issue of powers of appointment for a presentation, it dawned on me that I may have bit off more than I could chew. Although intuitively simple, my foray into the subject revealed layers of complexity and confusing overlays of obligations, duties, and powers. Concepts which appeared straightforward enough, such as "fiduciary duties", gave way to new terms such as "quasi-fiduciary" or "semi-fiduciary." Of course, nomenclature need not complicate an introduction to new concepts, but it often does.
In the English estates bar, much has been written of the role of the Protector as a non-trustee recepient of a power of appointment. A recent article in the Trusts Quarterly Review by Anton Duckworth provides a practical approach to resolving the confusion which often may arise in the consideration of powers of Protectors or other non-trustees appointed under a trust.
Duckworth points out that the role of the Protector has given rise to confusion due, in no small part, to the development of offshore trusts and the advent of the Protector as an alternative to the appointment of multiple trustees. He also points out that Trusts texts had, until recently, historically given scant attention to the issue of non-trustee powers. Certainly, in Ontario, a settlor may make a Power of Appointment to delegate decision making authority to someone other than the trustee. What matters is the effect of the settlor's intention. Because powers may be given to non-trustees for a variety of purposes, Duckworth astutely notes that "this makes life difficult for those who like short answers and standard documents."
Have a great day,
David
