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10 November 2014 | Comment | Article by Eleanor Evans TEP

Will trusts and the STEP Provisions

Georgia considers trusts created in wills and the powers given to trustees by the Society of Trust and Estate Practitioners (‘STEP’) Provisions.

When creating a will, you will need to consider who to appoint as executors and trustees. This is not a decision that you should take lightly and it is worth considering the two very different roles that an executor and a trustee play.

Quite often the same people will be appointed as both executors and trustees. The role of an executor is to administer your estate in accordance with the terms of your will, whereas the role of a trustee is to administer any trust arising under the terms of your will. Whilst the administration of your estate may not take all that long (the typical timescale is nine to twelve months), the administration of a trust may continue for many years. It is prudent therefore to consider whether the people you are appointing as executors of your will are also the best people to act as trustees. Please see my previous article on appointing executors (Choosing an executor: who do you trust with all your worldly goods?) and Paula Adams’s article (Who put the ‘trust’ in trustee?) regarding the duties of a trustee.

To administer any trust arising under the terms of your will, your trustees will need to be given certain powers. It is now common practise to incorporate the powers provided in what are known as the ‘STEP Standard Provisions’, now into its second edition, using the following wording:

‘The standard provisions of the Society of Trusts and Estate Practitioners (2nd edition) shall apply.’

But what do these provisions allow your trustees to do?

To invest monies

The trustee of your will is able to invest monies from the estate in order to maximise any benefit of the estate to your beneficiaries.

To manage property as though they are the owner

The trustee is able to ensure that any maintenance or repair work on a property is undertaken. For example, if you leave behind young children and they are to continue to live in the family home with their guardian, the trustee of your will can make sure that the property does not fall into disrepair.

To purchase property jointly with another

This power is particularly useful where a married couple are leaving their respective share of the family home to their children but allowing the surviving husband or wife to remain living there. Quite often, as the survivor grows old they will want to downsize the property. This power therefore allows the trustee to use the value of the deceased’s share in the family home to put towards the purchase of another property which will be owned jointly with the survivor.

This power is also useful where a property is to be purchased for a minor beneficiary to live in with their guardian(s). The trustee is able to use money from the estate to put towards the purchase of property which would then be jointly owned with the guardian.

To accumulate income generated on the estate

This is particularly relevant where you are benefitting a minor and you do not want them to receive any monies absolutely before reaching a certain age, for example 18, 21 or 25. The trustee can accumulate any income generated on their share of your estate rather than giving it to them (or their guardian) outright as and when it is generated.

To purchase property for the occupation of a beneficiary

This power is self-explanatory and can be exercised with the power to purchase property jointly with another.

To carry on any business

This power allows the trustee to carry on the trading of any business you may own or in which you have an interest. This is to ensure that the business carries on as normal after your death. The trustee will usually then seek someone to undertake this duty more long term if the business is to continue trading.

To pay maintenance or advance lump sums to a beneficiary

When you are benefitting young children, you want to make sure that they are provided for when they grow up. The trustees are able to advance monies to the guardian(s) of your children to ensure that your children are well provided for.

This power is also used where you have decided to postpone your children or any other person inheriting, for example, until the age of 21 or 25. If the beneficiaries need any money earlier than this age then the trustee is able to advance the relevant amount as they see fit.

Special provisions

The powers detailed above are the “standard provisions” which apply, but there are also special provisions which can be incorporated where the need arises. If any of the special provisions are to apply, they are to be specifically stated when incorporating the STEP provisions into your will.

The special provisions will be necessary where you have instructed that a certain trust (or trusts) is to be incorporated into your will. In some instances the special provisions will need to be incorporated where a trust is not present on the basis that your circumstances warrant the inclusion of them.

To read the STEP Provisions in full, please visit the website here.

Author bio

Eleanor Evans TEP


Eleanor is Head of the Trusts and Estates Administration Department, a large team dealing with estates and trusts administration on behalf of financial institution and trust corporation clients.  Eleanor is a specialist in wills, probate, tax and trusts, and is a full member of STEP (the Society of Trusts and Estates Practitioners).  She is also a committee member of the STEP Wales branch.

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