A trustee appointed under a Will must follow strictly the
directions given in the Will. However, where the administration of
a trust has become impractical by virtue of superseding events, the
courts in Ontario can allow an exception to this rule.
One such superseding event is low interest rates. It is an
appropriate example given the prevailing environment.
Endowments for charities are often set up by a Will that
stipulates the residue of an estate is to be set aside and
invested, and the income used in perpetuity for a particular
charitable purpose. But where little income is being generated, the
charity suffers and the deceased's intentions will be thwarted.
The courts of Ontario have permitted a trustee of a perpetual trust
and its beneficiary charities to ignore a donor's express
stipulation in a traditional income endowment, and to adopt the
more modern investment model known as "total return".
