Skilled Toronto Estate Lawyer Assisting with Variation of Trusts

An estate trustee has strict and quite onerous obligations to the estate they act for. The trustee is obligated to carry out their duties in accordance with the terms laid out in the trust document, and in accordance with the legislation governing their actions.

A trustee cannot vary the terms of a trust unless variation is specifically permitted in the trust document. If a trustee varies the terms without the explicit authority to do so, he or she is in breach of the trust and of his/her fiduciary duties.

If you have been appointed a trustee, the first thing you should do is seek the guidance of an experienced estate lawyer. NULaw and its predecessor firms have advised trustees in Toronto since 1953. Our estate lawyer, Lex Arbesman, has helped hundreds of clients understand the scope of their legal duties and obligations. Lex counsels trustees on the risks and liabilities that attach to their role and recommends best practices to mitigate those risks.

Methods of Varying a Trust in Ontario

Generally speaking, a court will not interfere with a trust and substitute its own judgment for that of the trust settlor. However, there are four possible grounds on which a court will make a variation: on consent, through the Variation of Trusts Act, via the court’s inherent jurisdiction, and through the court’s jurisdiction over charities.

On consent

If all beneficiaries are over 18, have the requisite mental capacity/are legally competent, and agree to vary the trust, the trust can be varied, terminated, or distributed, regardless of the settlor’s original wishes. This is known as the rule in Saunders v. Vautier.

Under the Variation of Trusts Act

The Variation of Trusts Act empowers the court to approve a variation of the terms of the trust “on behalf of”:

  • Any unborn person;
  • An infant or other person lacking capacity;
  • Any person whose interest in the estate is contingent on an uncertain future event;
  • Any person whose interest in the estate is contingent on the future exercise of discretion.

This was mainly a response to the fact that the rule in Saunders v. Vautier only applies to situations in which all beneficiaries are of the age of majority and legally competent.

Through the Court’s Inherent Jurisdiction

The court has inherent power to authorize trustees to vary the trust or dispose of specific trust property in several specific and legally technical situations.

Through the Court’s Jurisdiction Over Charities

Pursuant to S. 13 of the Charities Accounting Act, an order from the court to vary a charitable trust can be obtained in very limited and specific situations:

  1. Cy-Pres orders can be obtained if it is impossible or impractical to apply charitable property to its original purpose. In that situation, a new purpose as close as possible to the original can be substituted.
  2. Where the methods of carrying out the charitable objects do not work (i.e. there are no provisions for the replacement of trustees or the trust requires certain investments that are no longer available) the court can make orders setting out new powers to appoint trustees or new investment powers.

Contact the Trusted Toronto Estate Lawyer at NULaw for Assistance with Variation of Trusts

NULaw and its predecessors have been advising clients with trust variations for over 60 years. We draw on our extensive experience to guide clients through the ins and outs of the trust variation process and help them manage any personal risk as well as any risk to the trust and beneficiaries. Contact us online or at 416-481-5604 for a consultation.

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509 Davenport Road
Toronto, ON M4V 1B8

Tel: +1 416 481 5604 Fax: +1 416 481 5829

NULaw proudly services clients in Toronto and throughout Ontario