#certainties #equity #law
In McPhail v Doulton [1971] AC 424, the House of Lords relaxed the test for discretionary trusts, adopting the less strict test which applies to mere powers of appointment. Lord Wilberforce deliberately characterised the powers of trustees of a discretionary trust as ‘trust powers’ because the trustees were under a duty to exercise those powers, while the trustees were under no such duty in respect of mere powers of appointment. Trust powers and powers of appointment were both powers and so should be subject to the same test for certainty. Note; that in a discretionary trust deed the trustees often have a discretionary mere power of appointment (e.g. in favour of charity or another branch of the settlor’s family) that they may or may not exercise as they see fit from time to time, as well as their basic discretionary trust power that they must exercise to distribute income or capital to such beneficiaries as they choose, if they do not choose to exercise their mere power of appointment
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