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TRUSTEE ACT 1925 - SECT 46 Appropriation

TRUSTEE ACT 1925 - SECT 46

Appropriation

    (1)     A trustee may appropriate any part of the property subject to the trust or of the real or personal estate of a testator or intestate in its actual condition or state of investment in or towards satisfaction of a legacy or of any share or interest in the property or estate, whether settled or not, as to the trustee may seem just and reasonable, according to the respective rights of the persons interested in the property or estate, but—

        (a)     the appropriation shall not be made so as to affect prejudicially any specific gift, devise or bequest; and

        (b)     the appropriation shall be made with the consent (if any) required by this section; and

        (c)     in making the appropriation the trustee shall have regard to the rights of any person who may afterwards come into existence or who cannot be found or ascertained at the time of the appropriation or as to whom it is uncertain at that time whether he or she is living or dead, and of any other person whose consent is not required by this section.

    (2)     The power of appropriation conferred by this section applies to—

        (a)     property over which a testator exercises a general power of appointment; and

        (b)     setting apart a fund to answer an annuity by means of an income of the fund or otherwise, provided that at the time of appropriation the fund would be sufficient, if it were invested in government securities of the Commonwealth at par, to provide an income exceeding the annuity by at least 15%; and

        (c)     setting apart a sum of money in or towards the satisfaction of a legacy share or interest.

    (3)     For the purpose of an appropriation under this section, the trustee may ascertain and fix the value of the respective parts of the property or estate and the liabilities to which the property or estate is subject as the trustee may think fit, and shall for that purpose employ a duly qualified valuer in any case where such employment may be necessary.

    (4)     An appropriation made under this section shall bind all persons interested in the property or estate, including the persons whose consent is not required, and to the extent to which the appropriation is made in or towards satisfaction of the legacy, share or interest, the rights to which any person is entitled in virtue of the legacy, share or interest shall be restricted to the part of the property or estate so appropriated and shall not extend to any other part of it that may be dealt with or disposed of freed from any such rights.

    (5)     An appropriation of property whether it is or is not an investment authorised by law or by the trust instrument for the investment of money subject to it, shall not, except as otherwise provided by this section, be made for the benefit of a person absolutely and beneficially entitled in possession, unless the person is not a person with a legal disability and consents in writing.

    (6)     An appropriation must not, except as otherwise provided in this section, be made in relation to a settled legacy, share or interest, unless 1 of the following consents in writing:

        (a)     the trustee (if any) of the legacy, share or interest, if the trustee is not making the appropriation;

        (b)     the person who is, for the time being, entitled to the income.

    (7)     If the person whose consent is required under subsection (5) or (6), not being the trustee of a settled legacy share or interest—

        (a)     is a child—the consent may be given on his or her behalf by his or her parents or parent with whom he or she resides or in whose custody he or she is, as the case may be, or by his or her testamentary or other guardian, or if there is no such parent or guardian, by the Supreme Court; or

        (b)     is a person with a mental disability—the consent may be given on his or her behalf—

              (i)     by the guardian of the person, or the manager of the person's property, under the Guardianship and Management of Property Act 1991

; or

              (ii)     if there is no such guardian or manager—by the Supreme Court; or

        (c)     is a person who cannot be found or ascertained, or as to whom it is uncertain whether he or she is living or dead—the consent may be given on his or her behalf by the Supreme Court.

    (8)     If the appropriation is of an investment authorised by law or by the trust instrument, no consent except that of the trustee (if any) of a settled legacy share or interest shall be required on behalf of—

        (a)     a child if there is no parent or guardian; or

        (b)     a person with a mental disability if there is neither a guardian of the person nor a manager of the person's property under the Guardianship and Management of Property Act 1991

; or

        (c)     a person who may come into existence after the time of appropriation, or who cannot be found or ascertained at that time, or as to whom it is uncertain at that time whether he or she is living or dead.

    (9)     Notwithstanding subsection (1) (b), (5) or (7), the consent of the annuitant shall not be necessary in any case in which the trustee, after having set apart a fund to answer the annuity, which fund at the time of appropriation would be sufficient, if it were invested in government securities of the Commonwealth at par, to provide an income exceeding the annuity by at least 20%, has actually invested the fund in such securities.

    (10)     Where an appropriation is made under this section in respect of a settled legacy, share or interest, the property appropriated shall be subject to all trusts for sale and powers of leasing, disposition, management and varying investment that would have applied to the property or to the legacy, share or interest in respect of which the appropriation is made, if no such appropriation had been made, provided that nothing in this section shall relieve the trustee of the settled legacy, share or interest, where he or she is not the trustee making the appropriation, from the obligation to obtain payment or transfer of the property appropriated, if it is so payable or transferable.

    (11)     Where the exercise of any power of sale conferred on a legal representative by the Administration and Probate Act 1929

, section 50 is subject to any condition or to the leave of the Supreme Court being obtained, the legal representative shall not be entitled to appropriate any part of the real estate under the powers conferred by this section, except with the leave of the court.

    (12)     The trustee may make any conveyance or assent which may be necessary for giving effect to an appropriation under this section.

    (13)     Any appropriation or disposition of property made in purported exercise of the powers conferred by this section shall, in favour of an honest purchaser or the registrar-general, be taken to have been made in accordance with the requirements of this section, and after all requisite consents (if any) have been given.

    (14)     In this section:

"settled", in relation to a legacy, share or interest, means a legacy, share or interest settled by the trust instrument or another instrument, and includes a legacy, share or interest to which a person is not absolutely entitled in possession on the day the appropriation is made.

    (15)     This section shall not prejudice any other power of appropriation conferred by law or by the trust instrument, and the powers conferred by this section shall be in addition to any such power.

    (16)     This section applies to a trust except so far as the contrary intention appears in the trust instrument.