When you make a Will, for it to be accurate and unambiguous and ‘fit for purpose’, it is necessary for specific wording to be contained within. This wording may seem, to the layperson, like legalese, but it’s key to the Will being sufficiently robust so that, when you die, there is little risk of the will being successfully challenged and your Executors can swiftly administer your Estate with few complications.
Following the STEP (Society of Trust and Estate Practitioners) guidelines you can be sure that every effort has been made to ensure that your will is appropriate for you and your circumstances.
What is STEP?
The Society of Trust and Estate Practitioners (STEP) is the worldwide professional body which promotes high professional standards and education for its members, comprising lawyers, accountants, trustees and other practitioners that help families plan for their futures.
What are STEP Provisions?
If your Will contains reference to the ‘Standard Provisions and all of the Special Provisions of the Society of Trust and Estate Practitioners (2nd or 3rd Edition)’, these are referred to as the STEP Provisions.
Any properly drafted Will must contain a large amount of text dealing with routine Estate administration matters. Prior to the introduction of STEP provisions, it been necessary to set any administration elements in full in each Will. In 1992, STEP condensed the administration provisions required in into the set Standard Provisions. It is now in its second edition and is use widely amongst those Will drafting. Drafted and approved by STEP, the provisions are administrative by nature and mainly relate to the responsibilities of your Trustees, serving as a framework that governs the administration of both estates and trusts.
The purpose of the STEP provisions is that it sets out clear provisions to include in a Will with the aim to avoid complicated and technical terms that may confuse people who are not legal professionals. By providing a standardised set of guidelines and powers, they offer clarity and protection to both beneficiaries, Executors and Trustees.
The STEP provisions are divided into two; there are the core provisions, known as the ‘standard provisions’, and additional optional provisions referred to as the ‘special provisions’, which cover some niche and unique aspects of Estate administration.
The latest edition (3rd Edition) was released in 2023.
Why do I need these administrative provisions in my Will?
The reason for including the STEP provisions within your Will is that it provides a standardised set of administrative powers and guidelines, with the purpose of offering clarity and safeguarding the interests for the beneficiaries, Executors and Trustees.
It is important to include administrative powers when drafting a Will. When a Will lacks administrative powers, it means that the Trustees are to rely on statutory powers only (powers which are given to them by law). This includes that of the Administration of Estates Act 1925 (AEA 1925) and the Trustee Act 1925 and the Trustee Act 2000.
Dealing with the administration of someone's estate can be a complex pursuit and therefore, one issue with statutory powers within a Will is that they may not cover all powers that the Executors and/or Trustees need to do such a complicated and precise job. Certain powers therefore would need to be included within a Will but to include them all would make it a very length and wordy Will!
By making reference to the provisions within the Will, the STEP provisions incorporate all the administrative powers that Executors and/or Trustees would need when handling the administrative of the Estate, which allows the Wills to be shorter in length and substantially more concise and understandable.
Are there are essential provisions that I should be aware of?
STEP Standard Provisions
The STEP Standard Provisions run from 1 to 12 - the most commonly referred to standard provisions that you should be aware of are:
Provision 4 deals with the additional powers of Trustees and is divided into eighteen subsections.
Some examples of the provisions under provision 4 include: provision 4.1 which grants Trustees with wider powers of investment than are generally allowed by statutory law, provision 4.2 which allows the Trustees to manage Trust Property without restriction and where it is land, they are permitted to repair, maintain, develop or improve that land. Provision 4.8 which allows Trustees to carry on a trade in which the deceased was involved in, on their own or together with any other person. Provision 4.15 removes the requirement for Trustees to obtain the consent of a beneficiary to Trust Property being appropriated to meet, in full or in part, a beneficiary's entitlement in satisfaction of their interest in the Trust Fund.
Provision 8 deals with any conflict of interest between that of beneficiaries and Trustees. Generally, law a trustee cannot act where there is a conflict between their fiduciary duties (an obligation of loyalty and trust to the beneficiaries) and their personal interests.
It is most common to appoint a Trustee as a beneficiary and therefore, this places a Trustee (who is also a beneficiary) in a position of conflict. Provision 8 deals introduces that of an ‘independent trustee’ with the objective to prevent any conflict of interest by stating that the trust powers may only be used to benefit a Trustee who is also a beneficiary if an independent Trustee acts.
Provision 10 allows a professional Trustee (someone acting in a professional capacity, so this could be an appointed firm of solicitors) to charge a reasonable fee for any work they carry out on behalf of the trust.
Provision 11 protects Trustees – it states that “a Trustee shall not be liable for a loss to the Trust Fund unless that loss was caused by his own actual fraud or negligence.” With administration, there is a potential that something could go wrong. Provision 11 protects Trustees from any liability for breaches, only if the Trustee has acted in good faith and with reasonable care.
However, Provision 11.2 provides that where a Trustee is a Lay Trustee (i.e. not a professional trustee or a Trust Corporation) they are not liable for any loss arising from their own negligence provided there is another trustee who is not a Lay Trustee.
STEP Special Provisions
The STEP Special Provisions run from 13 to 20 - the Special Provisions are not necessarily appropriate for inclusion in all wills and trusts. The clause in the will or trust incorporating these provisions will identify if any (or all)of the Special Provisions are to apply. If there is no reference to Special Provisions, then none will apply to the terms of the will or trust in question.
Some of the Special Provisions include (but are not limited to):
This provision allows individual Trustees a wide power to delegate any of their trustee activities, including decision making, to a third party (which could include another trustee), however the delegating Trustee needs to be satisfied that whoever they appoint as their delegate is reasonably competent to deal with any of the matters delegated to them.
Provision 15.1 allows Trustees to start a company anywhere in the world, provided that it is for the benefit of the Trust.
Provision 19.2 permits Trustees to pay capital expenses, including tax liabilities out of income.
To summarise, STEP provisions are very effective in providing clarity and completeness to the duties and powers of your Trustees. By providing a standardised set of guidelines and powers, they offer precision and protection to all parties involved. You can download a copy of the STEP provisions from the STEP website at: https://www.step.org/public-policy/step-standard-provisions
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About the Author
Molly joined Thornton Jones Solicitors in March 2023 after completing her training contract at Levi’s Solicitors. At time of writing, she is awaiting her Legal Practice Course results which will certify her as a fully qualified solicitor.
Molly studied her Law Degree and LPC at Leeds Beckett and an LLM Masters (Master of Laws) at Leeds University. She joins our Private Client team here at Thornton Jones and brings her experience of working in Private Client and Litigation departments since 2018.
Outside of work Molly admits to her free time being taken up by her Dachshund puppy who causes lots of trouble and is a travelling partner (almost) wherever molly goes. When not tending to her puppy’s needs, Molly enjoys spending time with friends and family.
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