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Review Your SQE 1 Practice Records

Examination Timing: 00H00M54S

Laura is drafting her will and wishes to ensure that there are no issues regarding ascertaining the beneficiaries. She includes a proviso in the will allowing her trustee, John, to decide in his absolute discretion who is a beneficiary. Which of the following statements best describes the position?

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Your selected option: E

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The correct answer is E. A general power for the trustee to define the beneficiaries will not itself usually be administratively unworkable or impossible for the courts to judge. However, the fact that such a power may be required would necessarily mean that the objects of the trust are not sufficiently defined and therefore that the objects are uncertain. The courts have held (Re Coxen) that inherent uncertainty cannot be overcome simply by giving the trustees the power to determine the beneficiaries. The trust must be sufficiently certain to allow the beneficiaries to be determined. 

Key Point: Certainty of objects is a crucial requirement for a valid trust. A trustee's discretion alone cannot rectify a lack of certainty in identifying beneficiaries.

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