Portal:Law of England and Wales/Selected legislation/14

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The Variation of Trusts Act 1958 (C.62) is an Act of the Parliament of the United Kingdom that governs the courts' ability to vary the terms of trust documents. Prior to the 1950s, the courts were willing to approve "compromise" agreements as to what terms meant, not only when they were disputed but also for the benefit of certain parties, such as minors. In 1954, the House of Lords decided in Chapman v Chapman that this would no longer be permitted. The Act was brought in to deal with the problem. The Act gave the courts near-unlimited discretion to approve "compromise" agreements, for the benefit of infants or other incapable individuals, for individuals who may become beneficiaries, or for unborn beneficiaries. The courts have interpreted the Act's scope fairly widely, stating that almost any "variation" is acceptable, and that "benefit" may mean not just a financial benefit, but also a social or moral one. Despite initial fears that it would allow tax planners another way to hide funds and create a back-and-forth fight between the Chancery Division and Parliament, the Act was met with general approval. The ability of the courts to alter trustees' investment powers under the Act was criticised as slow and expensive, and as a result this is now covered by the Trustee Investments Act 1961. (more...)