Estate Planning

Variation of Trust - The Deed of Arrangement

By Hull & Hull LLP

Today’s blog is a continuation of my blogs this week on the variation of a trust under the Variation of Trusts Act and will focus on the Deed of Arrangement. 

The approach to, and content of, the Deed of Arrangement will most certainly depend on the circumstances involved. The approach to the Deed of Arrangement may be quite different if the variation arises as a result of an ongoing proceeding (and has been negotiated as part of that proceeding conditional on Court approval) than if it does not.
 

A Deed of Arrangement typically names and is signed by all capacitated beneficiaries. These beneficiaries are usually identified and grouped according to their interest in the trust. The trustee is also usually identified and is a signatory of the Deed of Arrangement as the trustee consents to act under the varied trust. Incapacitated beneficiaries are not typically named as parties to the Deed of Arrangement as the Court is approving the variation on their behalf.

A Deed of Arrangement may (depending on the provision and as necessary) also contain (the following are not meant to be exhaustive) (i) recitals which provide background on the trust, the parties, trustee, potential beneficiaries and provisions of the trust including, as necessary, the term in the trust that is being varied, (ii) a paragraph that the Deed of Arrangement is subject to Court approval on behalf of the incapacitated beneficiary(ies), (iii) paragraphs setting out the variation, with the paragraph number of where the paragraph fits into the trust and indicating how the paragraph fits into the trust, (iv) paragraphs addressing, if applicable, any action that is required as part of the variation, (v) a paragraph allowing for the Deed of Arrangement to be signed in counterpart if there are numerous parties, (vi) a paragraph addressing the payment of the costs of the preparation of the Deed of Arrangement and the Application, and (vii) a paragraph addressing the legal advice obtained.

Thanks for reading, Craig
 

Full post as published by Toronto Estate Law Blog on October 16, 2008 (boomark / email).