Revocation Of A Power

Question 1

Q1. (Article 40 Reference)
Under Article 40 of the Trusts (Jersey) Law 1984, which actions can be expressed to be “revocable whether wholly or partly”?

Answer 1

A1. Both the trust itself and the exercise of a power under the trust can be declared revocable. The article also states it can be “capable of variation.”

Question 2

Q2. (General Application)
If a trustee expressly reserves a right to revoke a power (such as a power of appointment), who typically holds that revocation power?

Answer 2

A2. Usually the same person who exercised the power, unless the trust deed specifies someone else. If the trust deed is silent, it’s presumed the power-holder retains the right of revocation.

Question 3

Q3. (Article 40(2))
According to Article 40(2), does the revocation or variation of a power affect acts the trustee performed before they received notice of the revocation?

Answer 3

A3. No. Any lawful act done by the trustee prior to receiving notice remains valid. Revoking the power can’t undo actions that were already carried out in good faith.

Question 4

Q4. (Reed v Papyrus Investments Ltd)
In Reed v Papyrus Investments Ltd, why did the Royal Court conclude the trustee’s appointment of shares was irrevocable?

Answer 4

A4. The deed said the shares were appointed to the beneficiary “absolutely and without reservation.” The court found no evidence supporting revocability. So, the beneficiary owned the shares’ proceeds even though they were never transferred in his name.

Question 5

Q5. (Reed v Papyrus) Continued
In Reed v Papyrus, what was the trustee’s unsuccessful argument concerning the appointed shares?

Answer 5

A5. The trustee claimed the original appointment was revocable. The court disagreed, pointing to clear wording (“absolutely and without reservation”), leaving no indication it was meant to be undone.

Question 6

Q6. (Appointment by Will)
Does subsequent marriage of a testator automatically revoke a power of appointment made in their will?

Answer 6

A6. No. A power of appointment made by will is not annulled simply because the will is revoked by marriage. There’s a distinction between revoking the will itself and revoking an appointment within it.

Question 7

Q7. (General)
Why must trustees or other power-holders be explicit if they want to keep a power’s exercise revocable?

Answer 7

A7. Because Article 40 requires an express statement of revocability. Otherwise, courts (like in Reed v Papyrus) may deem an appointment irrevocable, locking in the beneficiary’s interest.