Skilled Toronto Estate Lawyers 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. Arbesman Hamilton LLP and its predecessor firms have advised trustees in Toronto since 1953. Our estate lawyers have helped hundreds of clients understand the scope of their legal duties and obligations, have counselled trustees on the risks and liabilities that attach to their role, and have recommended 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 Lawyers at Arbesman Hamilton LLP for Assistance with Variation of Trusts

The lawyers at Arbesman Hamilton LLP 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.

Blog

Mar 21

There are countless variables that impact our day-to-day lives, many of which are out of our control Ironically, one of these variables is death Of course, the death of... Read More

Mar 15

A couple going through separation or divorce may very well be looking forward to reaching the point where all issues related to their time as a couple are resolved and... Read More

Mar 8

There can be a number of issues that may lead a couple to divorce, and some of these can be difficult for the courts to manage A recent decision from the Ontario Court... Read More

Feb 26

Everybody makes decisions in life that they wish they could take back, including marriages Most of the time when a marriage ends, it ends as a result of a divorce... Read More

Feb 22

Disputes around custody and access can be some of the most difficult for a couple to deal with when going through a divorce or separation Fights over who is a child’s... Read More

Insert – Contact

Contact