STEP Provisions – Third Edition

30th November 2023Manisha Chauhan0

You may already be aware that the third edition of the Society of Trust and Estate Practitioners (STEP) Standard Provisions was published on 2nd November 2023.

As with the second edition, the newer edition keeps the division between the standard and special provisions.

Let’s look at some of the changes that have been made:-

Provision 4.16 has been widened to ensure that new entities such as Charitable Incorporated Organisations are included.

Provision 5 modified section 31 of the Trustee Act 1925 which gave the trustees a power to apply income for the maintenance and minors. It also modified section 32 relating to a power of advancement. This provision has been removed in the third edition as the Inheritance and Trustees Powers Act 2014 amended the Trustee Act 1925. As this is now covered in statute, it is no longer required.

Provisions 9 and 10 authorise professional trustees and trust corporations to act on the basis of their terms and conditions as published from time to time. Previously, professional trustees could only rely on their terms that were published at the date of the will or trust, or earlier if the parties agreed.

Provision 15 (formerly provision 16) in the second edition has been expanded to include additional provisions for companies. Trustees now have the power to incorporate and promote companies including starting a company anywhere in the world as long as it benefits the trust. They can also enter into a range of arrangements relating to companies in which the trust is invested which includes takeovers and winding up of companies.

Provision 16  (formerly provision 17) – where s31 Trustee Act 1925 applies, a beneficiary becomes entitled to trust income at the age of 18. This was modified in the second edition so that a beneficiary became entitled to trust income at the age of 21. In the third edition, this has been modified even further so the beneficiary only becomes entitled to trust income at the age of 25 years old.

Provision 18 in the second edition which related to powers over capital has been removed as a special edition and is now a standard edition.

New provision 18.3 – this has been added to state the situations where a person would be deemed incapable of acting as a trustee.

Provision 22 of the second edition has been removed. This was previously a special provision and allowed trustees of a will trust to appropriate specific assets from the trust to satisfy a beneficiary’s interest using the value of the assets at the date of the testator’s death. This has been removed as the valuation should be made at the time of the appropriation as a matter of general law. STEP recommend it should be added as a bespoke power after discussion with the client.

You can download a full copy of the third edition and a number of additional resources by visiting STEP’s website.

Manisha Chauhan

Manisha joined the Society’s Technical Advice Team in July 2019 having previously worked as an Employment Solicitor in Warwickshire before relocating to Lincolnshire. Manisha provides advice on technical queries for Society Members and ongoing support on our professional drafting software, Sure Will Writer.

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