Blessing Orders: When should a trustee apply to the court to bless a decision?

Trustees are often tasked with making decisions about how a trust should operate. If a decision that a trustee has to make is considered ‘momentous’, then they may consider applying to obtain approval from the court before making that decision, by way of a blessing order application.

There is no formal guidance about what constitutes a ‘momentous’ decision, and it will largely depend on the size and nature of the trust and the likely contention from beneficiaries that may come about from that decision. Some examples of decisions that may warrant a blessing order application are:

• the sale of a major trust asset;
• an unusually large distribution from the trust; or
• a winding up of the trust.

The court has a supervisory role in the administration of trusts and has jurisdiction to approve the exercise of a trustee’s power. This was confirmed in the case of Public Trustee v Cooper [2001] which sets out the test the court will apply in determining whether or not to bless a trustee’s decision:

1. Has the trustee in fact formed the opinion that he should act in the way for which he is now seeking the court’s approval?
2. Is the opinion one which a reasonable body of trustees, properly instructed as to the meaning of the relevant clause could properly have arrived?
3. Has the trustee’s decision been vitiated by any conflict of interest?

If the court decides to bless the trustee’s decision, then the beneficiaries of the trust cannot seek to challenge that decision further down the line, nor can they allege that the decision constitutes a breach of trust. As such, in order for the application to have the desired effect, full and frank disclosure by the trustee of all relevant facts to the court is imperative.

The purpose of a blessing application is not for the court to make the decision on the trustee’s behalf, but to look at the decision of the trustee, apply the test to decide whether to bless the trustee’s decision.

On 24 April 2024, Anthony Gold will be hosting a seminar with Radcliffe Chambers on the subject of “Claims for and against estates” during which blessing orders will be discussed in more detail. For further information or to sign up,click on the banner below: